Asian shares higher but Russia-Ukraine tensions weigh

In this Aug. 8, 2014, file photo, a man walks past an electronic stock board of a securities firm in Tokyo. Asian shares mostly rose Monday but gains were capped by the latest tensions between Russia and Ukraine, despite some progress cited in the “difficult” negotiations between the two sides. AP PHOTO/EUGENE HOSHIKO

HONG KONG–Asian shares mostly rose Monday but gains were capped by the latest tensions between Russia and Ukraine, despite some progress cited in the “difficult” negotiations between the two sides.

Also weighing on sentiment was a report showing China’s foreign direct investment slumped to a two-year low, adding to a series of downbeat data about the world’s second-largest economy.

But bargain hunting pushed Shanghai higher, rising 0.57 percent, or 12.74 points, to an eight-month closing high of 2,239.47. Hong Kong ended flat, edging up 0.52 points to 24,955.46.

Sydney gained 0.37 percent, or 20.6 points, to 5,587.1, but Seoul lost 0.49 percent, or 10.09 points, to 2,053.13. Tokyo closed flat, inching up 4.26 points to 15,322.60.

In Thailand, news that the economy grew 0.9 percent in the second quarter–dodging recession after the military ended months of political deadlock with a coup–failed to produce a rally, with stocks shedding 0.28 percent, or 4.26 points, to close at 1,542.36.

Southeast Asia’s second-largest economy still looks set for a disappointing year, with officials clipping the growth outlook for 2014–forecasting 1.5-2.0 percent expansion on Monday, down from a previous estimate of 1.5-2.5 percent.

US shares rebounded late Friday to end mixed after an early bout of selling on news that Ukraine had shelled Russian armored vehicles after they entered its territory.

The Dow Jones Industrial Average ended down 0.30 percent at 16,662.91, after earlier having shed 0.50 percent on the news.

Worries that the incident would lead to a direct clash between the two ebbed after Moscow denied the incursion and Ukraine’s foreign minister agreed to meet his Russian counterpart in Berlin on Sunday.

The two sides ended the “difficult” talks on the crisis with no concrete advances but “some progress,” host Germany said, as clashes continued on the ground.

The nature of the progress was not disclosed by either party, but Germany’s Foreign Minister Frank-Walter Steinmeier stressed the need for both nations to avoid “sliding ever deeper into a direct confrontation.”

Dollar expected to gain

In currency markets, the dollar edged down to 102.32 yen in afternoon Asian trade, compared with 102.34 yen in New York late Friday.

The greenback is expected to gain in volatile forex trading this week, ahead of a speech on Friday by US Federal Reserve chief Janet Yellen at the central bank’s annual economic policy symposium as investors look for any hint of a change to the Fed’s interest rate plans.

Last month Yellen told Congress the Fed would hold its near-zero interest rate policy until the US economy strengthens, but may raise rates if the jobs market kept improving.

The euro bought $1.3393 and 137.05 yen against 1.3397 and 137.11 yen in US trade.

In oil markets, US benchmark West Texas Intermediate for September delivery was down 62 cents at $96.73, while Brent crude for October fell 92 cents to $102.61.

Gold traded at $1,302.22 an ounce at 1105 GMT compared to $1,313.53 an ounce late Friday.

In other markets:

— Jakarta rose 0.15 percent, or 7.79 points, to close at 5,156.75.

Car maker Astra International was up 0.33 percent to 7,675 rupiah, while Bank Permata fell 0.36 percent to 1,375 rupiah.

— Kuala Lumpur shed 0.14 percent, or 2.56 points, closing at 1,861.75.

Utility giant Tenaga Nasional slipped 0.16 percent to 12.30 ringgit, Telekom Malaysia declined 0.48 percent to 6.24 and RHB Capital added 3.11 percent to 9.28 ringgit.

— Manila gained 0.27 percent, or 19.07 percent, to 7,027.58.

Top-traded Philippine Long Distance Telephone Co. bucked the trend to fall by 0.43 percent to 3,236 pesos while Ayala Land Inc. rose 1.88 percent to 32.60 pesos.

— Mumbai advanced 1.10 percent, or 287.73 points, to end at 26,390.96, having touched a new high of 26,413.11 points during the session.

Gitanjali Gems rose 8.70 percent 69.95 rupees, while Amara Raja Batteries rose 7.29 percent to 577.40 rupees.

— Taipei fell 0.71 percent, or 65.5 points, to 9,141.31.

Taiwan Semiconductor Manufacturing Co. was 0.81 percent lower at Tw$123.0 while Hon Hai Precision Industry was unchanged at Tw$108.0.

— Singapore eased 0.06 percent, or 1.99 points, to 3,312.78.

Oversea-Chinese Banking Corp. was flat at Sg$10.20 while Singapore Telecommunications was 0.26 percent lower at Sg$3.90.

— Wellington lost 0.14 percent, or 6.96 points, to 5,071.12.

Genesis Energy was down 1.37 percent at NZ$1.80 and Spark was off 2.08 percent at NZ$2.82.