Asian Shares Mostly Higher; Gold Miners Shine

SINGAPORE -- Asian stock markets were mostly higher on Wednesday, supported by Wall Street's rally. In Australia, gold miners were shining after spot gold prices hit a record high on Tuesday.

Investors were looking forward to the U.S. third quarter earnings, which kick off later on Wednesday with aluminum giant Alcoa reporting. "There are few negatives seen, with increasing optimism about profit margin expansion and not necessarily top line revenue growth driving the market," said Bell Potter Senior Client Adviser Stuart Smith in Sydney.

Australia's S&P/ASX 200 was up 1.4%, Japan's Nikkei 225 was up 0.8%, South Korea's Kospi Composite was 1.5% higher while New Zealand's NZX-50 down 0.3%. Dow Jones Industrial Average futures were up nine points in screen trade, after the DJIA closed up 1.4% Tuesday.

Inflows into the Australian market were coming from fund managers, noted Smith; "The big money is averaging up and they don't see any stones in the road at the moment but private investors seem to be waiting for a pullback, which we're all expecting but not getting," he said.

Gold miners were leading the way up after spot gold prices hit a new record high at $1,043.55 per troy ounce Tuesday. The yellow metal was last at $1,039.90 per troy ounce, down $1.10 from the New York close. Lihir Gold was up 5.7% and Newcrest Mining surged 6.9%.

Gains for base metals prices helped BHP Billiton up 2.1% and Rio Tinto up 3.7% while a rise in crude oil futures lifted Woodside Petroleum by 0.4% and Santos by 1.2%. The lead November Nymex crude oil futures contract was up 54 cents at $71.42 per barrel, after settling 47 cents higher on Tuesday in New York.

Miners and energy stocks were also outperforming in other Asian markets. In Japan, Sumitomo Metal Mining and Mitsubishi Materials were both 4.5% higher. In Korea, Posco gained 2.1% and Korea Zinc surged 8.1% while SK Energy rose 2.8%.

Korean banks and technology stocks were also higher after their recent weakness with KB Financial up 2.3% and Hynix up 2.9%.

Japanese materials manufacturer Tosoh was up 5.0% and peer Showa Denko gained 5.3% after the Nikkei reported the two were starting to produce safe, low-cost materials for lithium ion batteries with an eye on growing demand for green vehicles.

The New Zealand market had reversed early gains as heavyweight Telecom Corp. fell 2.3% and Fletcher Building lost 1.4%. Grant Williamson, an adviser at Hamilton Hindin Greene, said the drop in Telecom and Fletcher was probably due to some profit-taking. "If not for these two stocks the market would be firmer."

Comments from dairy giant Fonterra, which accounts for quarter of the country's exports, that wholesale milk powder prices at its October auction were up 5.7% from the month before were supportive.

In foreign exchange markets, the U.S. dollar was up a little against the yen after sharp losses on Tuesday and was trading at Y88.89 from Y88.76 in late New York trade. The euro was at $1.4712 from $1.4724 and at Y130.76 from Y130.66.

The London Metals Exchange three-month copper futures contract was at $6,097 per ton, down $17 from the London afternoon kerb, while three-month aluminum was down $7 at $1,822 per ton.

The base metals market was pulling back slightly after strong gains on Tuesday. ANZ Senior Commodity Strategist Mark Pervan said: "Base metals are following the dollar. Copper is still favorable, but the outlook for aluminum is looking pretty precarious. About one-third of China's smelting capacity remains offline."

The lead December Japanese government bond futures contract was down 0.04 at 139.55 points, weighed by the Nikkei's gains and U.S. Treasurys' losses Tuesday. The 10-year cash JGB yield was untraded from Tuesday's close at 1.240%.