Asian shares up on bargain hunting, China data

HONG KONG—Asian stocks rose on Wednesday on bargain hunting, with Hong Kong and Shanghai boosted by growth data suggesting China’s economy was slowing but remained robust.

But concerns over the eurozone debt crisis continued to dampen sentiment, although the euro made small gains later in the day despite news that Ireland’s credit rating had been downgraded to junk status.

Shanghai jumped 1.48 percent, or 40.89 points, to 2,795.48 and Hong Kong jumped 1.22 percent, or 263.72 points, to 21,926.88.

Sydney added 0.43 percent, or 19.4 points, to end at 4,514.8 and Seoul climbed 0.94 percent, or 19.91 points, to 2,129.64.

Tokyo gained 0.37 percent, or 37.22 points, to 9,963.14.

China’s National Bureau of Statistics said the economy grew 9.5 percent in the April-June quarter, slower than the 9.7 percent recorded in the previous three months but quicker than the 9.4 percent forecast by analysts.

The NBS also said growth hit 2.2 percent quarter on quarter, faster than the 2.1 percent rise between January-March and the previous three months.

Wednesday’s figures come after a string of monetary tightening measures by Beijing – including five interest rate hikes since October – aimed at cooling inflation, which hit a three-year high of 6.4 percent in June.

Although inflation is running stubbornly high – well above the government’s full-year target of four percent – there is hope that the latest data will allow leaders to hold off any more hikes.

“Overall it does highlight that it’s been a pretty moderate slowdown since the start of the year, driven by domestic policy measures,” Royal Bank of Canada senior strategist Brian Jackson told AFP.

He added that concerns over a hard landing for China, which could have detrimental knock-on effects for other reliant economies, were “overdone.”

“Encouraging economic data out of China today gave a much-needed psychological lift,” Tim Waterer, senior currency dealer at CMC Markets, told Dow Jones Newswires.

The data also provided some support for markets whose economies depended heavily on China to boost their own growth, such as South Korea and Australia, key trade partners with Beijing.

Wednesday’s region-wide gains follow a heavy sell-off in the previous two days caused by the ongoing troubles in the eurozone.

But eyes are still on Europe, where surging yields on Italian and Spanish government bonds have sparked fears that the crisis was spreading from Greece to the eurozone’s third- and fourth-largest economies, respectively.

Ministers pledged late Monday to strengthen the size and scope of a multibillion-euro fund set up to avoid another economy suffering the same fate as Greece, which is in need of a second bailout.

But a meeting of eurozone finance ministers on Tuesday failed to inspire much confidence that the European Union was tackling the crisis, analysts said, with division over how to draw up Athens’ next rescue package.

Adding to the troubles was news that Moody’s had reduced Ireland’s government debt ratings by one notch, to Ba1 from Baa3 – junk status – saying there was a “growing possibility” the country would need more bailout aid.

The euro was sitting at $1.4074 against the dollar in early European trade, from $1.3975 late in New York Tuesday and at 111.57 yen from 110.75. Although the single unit edged up Wednesday it is still well down against the dollar and yen compared with Friday.

Appetite for risk stabilised “with reports the ECB was buying Spanish and Italian government bonds and the press suggesting Europe will need to issue joint bonds to end the sovereign debt crisis,” noted John Kyriakopoulos at National Australia Bank.

The dollar was at 79.26 yen, from 79.25 but the Japanese unit remains near its highest level since reaching a record 76.25 against the greenback after the March 11 earthquake, which prompted a Group of Seven forex intervention.

Markets are also keenly awaiting the outcome of stress tests on the eurozone banking sector.

The Sydney-listed shares of Rupert Murdoch’s News Corp. dived another three percent Wednesday as pressure piled on his empire from both British and US lawmakers.

The fall added to the 4.5 percent slump Tuesday, which took the shares to their lowest point in more than 18 months.

News Corp.’s Australian stock ended down 2.96 percent at Aus$14.74 (US$15.68).

The losses came as local arm, News Limited, condemned as “offensive and wrong” any suggestion linking it to the illegal phone-hacking scandal that felled British tabloid the News of the World.

Oil fell in afternoon trade, with New York’s main contract, West Texas Intermediate for delivery in August, 16 cents down at $97.27 a barrel and Brent North Sea crude for August 39 cents off at $117.36.

Gold, a safe haven in times of economic uncertainty, soared to close at $1,571.50-$1,572.50 an ounce in Hong Kong, well up from Tuesday’s close of $1,546-$1,547.

In other markets:

— Singapore rose 0.36 percent, or 11.06 points, to 3,088.42.

Oversea-Chinese Banking Corp. gained 0.32 percent to Sg$9.33 and SingTel was up 1.58 percent at Sg$3.21.

— Bangkok rose 1.41 percent, or 15.01 points, to close at 1,077.40.

Banpu jumped 14 baht to 720 baht and PTT Plc gained 3.00 baht to 332 baht.

— Taipei ended flat, edging down 2.95 points to 8,488.06.

Smartphone maker HTC shed 4.92 percent to Tw$870.0 on a fresh patent infringement complaint by Apple. Taiwan Semiconductor Manufacturing Co was 2.70 percent higher at Tw$72.2.

— Manila rose 1.24 percent, or 53.91 points, to 4,404.00.

Lepanto Mining surged 10.9 percent to 1.12 pesos, Metropolitan Bank gained 3.3 percent to 74.25 pesos and Philex Mining rose 4.5 percent to 25.40 pesos.

— Wellington ended 0.18 percent, or 6.02 points, lower at 3,424.53.

Retirement village operator Ryman Healthcare fell 4.0 percent to NZ$2.65 and Mainfreight shed 2.5 percent to NZ$10.12. However, Contact Energy rose 1.9 percent to NZ$5.33.

— Kuala Lumpur gained 0.16 percent, or 2.57 points, to 1,580.67.

Gaming giant Genting rose 0.2 percent to 11.02 ringgit but Malayan Banking fell 0.4 percent to 8.86 ringgit while Petronas Chemicals was down 0.1 percent at 7.06 ringgit.

— Jakarta rose 1.09 percent, or 42.83 points, to 3,980.85.

Coal miner Adaro ended two percent higher at 2,525 rupiah and rival Bumi Resources gained 1.7 percent to 2,975 rupiah.

Energi Mega rose 2.5 percent to 205 rupiah.

— Indian shares rose one percent, snapping three consecutive days of losses, on bargain hunting and firm global markets.

The benchmark 30-share Sensex index ended up 184.4 points to 18,596.02.

India’s top property firm DLF rose 2.95 percent or 6.5 rupees to 226.85.