Most Asian markets advanced Wednesday as steel stocks rallied on news China is aiming to consolidate the local industry, while Japanese exporters shrank further on the yen's strength against major currencies.
Japan’s Nikkei 225 Index subsided 21.67 points, or 0.2%, to 9,278.83
Hong Kong’s Hang Seng Index leaped 222.64 points, or 1.1%, to 20,487.23
The gains followed a strong midday rebound on Wall Street overnight, although weaker-than-expected results from Goldman Sachs and other U.S. heavyweight companies tempered sentiment.
Steel shares around the region rallied on news China is aiming to slash the number of steel makers in the country by about 75%.
Hopes that spot prices had reached a bottom also supported prices, with Deutsche Bank analysts writing in a note that about 40 medium to small mills in China had raised their prices modestly in the past two days.
Shares of Angang Steel Co. surged 7.9% and Maanshan Iron & Steel Co. jumped 7.5% in Hong Kong, while Posco gained 2.4% in Seoul, China Steel Corp. inched up 0.2% to outperform in Taipei.
In Tokyo, JFE Holdings rose 0.4% and Nippon Steel Corp. added 0.7% despite a report in the Nikkei newspaper that the two giants planned to cut domestic steel production amid slowing exports to China.
Although Japanese technology shares rose in early trading in the wake of strong fiscal third-quarter earnings from Apple, some of them erased those gains on worries about the yen's strength. Elpida Memory tumbled 3.5% and Toshiba Corp. fell 0.7%.
The yen's strength also hurt other exporters, with Toyota Motor Corp. sliding 0.8% and Nissan Motor Co. dropping 1%.
Nomura Holdings fell 3.8% and Daiwa Securities Group slid 3.5%, hurt by Goldman Sachs' weaker-than-estimated results.
Investors were also concerned the two financial companies may need to raise capital.
Shares of LG Chem surged 4.4% in Seoul after the company reported record second-quarter earnings Tuesday, beating estimates on strong sales of petrochemicals and rechargeable batteries.
Material stocks were generally higher around the region after the rebound on Wall Street and on an increase in crude-oil prices.
In Sydney, Rio Tinto was up 2% and BHP Billiton advanced 1.2%after reporting a strong performance in its fourth quarter, with production of iron ore and metallurgical coal both up 16% on-year. Cnooc climbed 2.4% and Aluminum Corp. of China advanced 3.2% in Hong Kong. Inpex Corp. rose 0.4% in Tokyo
In foreign exchange markets, the yen gained ground against the euro and the dollar ahead of Fed Chairman Ben Bernanke's testimony to Congress expected later in the global day. Bernanke's remarks "may increase the possibility of the Fed's monetary easing after dovish Federal Open Market Committee meeting results and recent weak U.S. economic data," says Mizuho Corporate Bank senior trader Yuichiro Harada.
The dollar dropped to 86.89 yen from 87.38 yen late in New York on Tuesday, while the euro was fetching 112.20 yen from 112.60 yen. The single currency was at $1.2863 U.S. compared with $1.2887 U.S.
CHINA
Shanghai’s CSI 300 Index gained 5.83 points, or 0.2%, to 2,747.34
Baoshan Iron & Steel Co. rose 1.1% and Wuhan Iron & Steel Co. advanced 1.3% in Shanghai
Elsewhere;
Singapore’s Straits Times Index gave back 22.52 points, or 0.8%, to 2,926.09
Korea’s Kospi index improved 12.01 points, or 0.7%, to 1,748.78
Taiwan’s Taiex Index slid 10.74 points, or 0.1%, to 7,701.29
New Zealand’s NZX index recovered 8.04 points, or 0.3%, to 3,003.41
Australia’s S&P/ASX 200 tacked on 9.10 points, or 0.2%, to 4,412.70
