Japan Stocks Shine, As China, Hong Kong Retreat

Japanese stocks ended sharply higher to lead Asian markets on Thursday, catching a tailwind from the yen’s weakness as doubts about U.S. monetary stimulus lifted the dollar.

Hong Kong shares did a U-turn in afternoon trading to finish lower on weaker-than-expected earnings from heavyweight China Mobile Ltd., while Chinese stocks ended lower as a contraction in July foreign direct investment shifted focus to the country’s economy health.

Japan’s Nikkei Stock Average JP:100000018 +1.88% jumped 1.9% to end at 9,092.76, its first close above the 9,000-point level since July 6. Australia’s S&P/ASX 200 index AU:XJO +1.14% rose 1.1%, Taiwan’s Taiex XX:Y9999 +0.30% added 0.3% and South Korea’s Kospi KR:SEU +0.05% rose 0.1%.

Going the other way, the Shanghai Composite Index CN:000001 -0.32% lost 0.3% after data showing foreign direct investment contracted 8.7% in July from a year earlier.

But while the Chinese markets didn’t immediately respond to Premier Wen Jiabao’s remarks Wednesday that he sees “growing room for monetary policy action,” analysts interpreted the comments as a positive sign for markets.

“Investors should draw comfort from his confidence, and speculation will revive about some form of People’s Bank of China action,” said Dariusz Kowalczyk, a senior economist at Credit Agricole.

Hong Kong’s Hang Seng Index HK:HSI -0.45% dropped 0.5%, weighed by a 5% drop in shares of China MobileHK:941 -5.03% CHL -0.69% after the company said its first-half profit grew just 1.5% from the year-ago period, falling short of estimates.

Japanese exporters got a boost from currency moves, with car makers particularly strong. Honda Motor Co. JP:7267 +2.10% HMC +0.47% shares were up 2.1%, Toyota Motor Corp. JP:7203 +3.17% TM -0.16% jumped 3.2% and Mazda Motor Corp. JP:7261 +3.26%MZDAF -3.58% advanced 3.3%.

The gains followed the dollar’s appreciation, as the strong tone of recent economic data led some Federal Reserve watchers to doubt it will launch another bond buying program next month.

Also getting a lift, Sony Corp. JP:6758 +3.93% SNE -2.73% jumped 3.9% and Canon Inc.JP:7751 +2.75% CAJ +0.32% rose 2.8%.

In Hong Kong, the losses for China Mobile stock overpowered earnings-driven gains for some other firms. Internet firm Tencent Holdings Ltd. HK:700 +6.35% TCEHY +1.83%jumped 6.4% after reporting a 32% rise in second-quarter net profit following an increase in advertising revenue.

Lenovo Group Ltd. HK:992 +6.28%LNVGY +0.41% jumped 6.3%. China’s largest personal computer maker by shipments said that its first-quarter net profit rose 30% from the same period a year ago due to strong growth in shipments.

AMP Ltd. AU:AMP +4.81% AMLTF -3.49% advanced 4.8% in Sydney after the wealth manager said its first-half net profit rose 10%, boosted by its purchase of AXA Asia Pacific’s Australian and New Zealand operations.

Wesfarmers Ltd. AU:WES +3.79% climbed 3.8% after the conglomerate reported an 11% advance in fiscal-year net profit to 2.13 billion Australian dollars ($2.2 billion) after a strong performance at its supermarket operations.

Energy-sector companies were advancing across Asia, after benchmark Nymex crude futures hit a three-month settlement high in New York on Wednesday.

Cnooc Ltd. HK:883 -0.52% CEO -0.10% shares rose 0.5% in Hong Kong, while Inpex Corp.IPXHF -7.76% JP:1605 +1.69% gained 1.7% in Tokyo.

Woodside Petroleum Ltd. AU:WPL +1.46% WOPEF +1.87% rose 1.5% and Beach Energy Ltd. AU:BPT +2.99% BCHEY 0.00% climbed 3% in Sydney.

Source: Market Watch