Asia Stocks Mostly Up, But China, Australia Slip

Most Asian markets moved modestly higher Wednesday, with Japan supported by deal speculation, although mainland Chinese and Australian shares declined.

Japan’s Nikkei Stock Average 100000018 rose 0.2%, while South Korea’s Kospi SEU edged up 0.3%, and Hong Kong’s Hang Seng Index HSI added 0.1%.

However, the Shanghai Composite Index 000001 declined 0.5%, and Australia’s S&P/ASX 200 index XJO lost 0.2%.

U.S. stocks ended Tuesday’s session on a mixed note, as lackluster data and caution ahead of Federal Reserve Chairman Ben Bernanke’s speech due Friday dominated trading. Read more on U.S. stocks.

Bernanke’s address is now the headline of the central bankers’ annual meeting at the Wyoming town of Jackson Hole, after European Central Bank President Mario Draghi canceled his Saturday speech, citing work, ahead of the ECB’s meeting on Sept. 6.

“Leaks suggest it has much to do with everyone trying to find a way to accommodate the Bundesbank position, and by implication the German constitution. This was taken as a positive by the market, while weak consumer confidence in the U.S. reinforces the view that Bernanke will move towards QE,” said Sebastian Galy at Societe Generale.

Deal speculation provided some impetus in Japan on Wednesday, after shares of Renesas Electronics Corp. 6723 RNECY surged 34.7% following a Nikkei report that U.S. investment house KKR & Co. KKR is planning to take control of the struggling chip maker. Read more on possible KKR takeover of Renesas.

Sharp Corp. 6753 SHCAF extended its advance this week by another 8.8%, getting support from a Kyodo News report that Taiwan’s Hon Hai Precision Industry Co. 2317 HNHAY would finalize its investment in the company this week.

Hon Hai also helped move shares of NEC Corp. 6701 NIPNF, which jumped 7.5% after Hon Hai chief Terry Gou reportedly said his company had a deal to purchase some patents from the Japanese firm.

Hon Hai’s own shares edged down 0.2% in Taipei.

South Korean technology firms were trading higher on Wednesday as well, with Samsung Electronics Co. SSNLF 005930, up 1.9% as the firm’s shares recoup more of the losses made after Apple Inc’s AAPL patent win late last week. LG Electronics Inc. LGEIY 066570 moved ahead by 4.5%.

Chinese investors retained a focus on earnings, with China Life Insurance Co. 2628LFC rising 3% in Hong Kong after posting a 26% first-half profit drop but a 2.5% rise in new business value.

“Operating trends were slightly better than expected, with focus on improving product mix paying off, and margins improving strongly,” Credit Suisse analysts said.

An advance for exporters also helped support the Hong Kong market, with Lenovo Group Ltd. 992 LNVGF up 1.6%, and Esprit Holdings Ltd. 330 ESHDF adding 1%.

But mainland Chinese property-focused firms lost ground in Hong Kong trading, with Evergrande Real Estate Group Ltd. 3333 EGRNF retreating by 3.8% after the property group reported that its first-half core earnings fell 21%.

“Evergrande’s 96% net gearing in mid-2012 is a surprise for the market. Although there is a possibility of achieving its sales target, investors should be concerned about its poor balance-sheet management,” said analysts at CIMB.

China’s official Xinhua news agency reported Wednesday that the chief of China’s top economic planner said that the country will need to work to prevent house from rebounding this year and causing a price bubble. Read more on Chinese comment on preventing a housing bubble.

Other mainland property plays losing ground included China Overseas Land & Investment Ltd. 688 CAOVF down 1.1% and China Resources Land Ltd. 1109CRBJF dropping 1.5%.

Hong Kong-listed resource firms also declined, with Aluminum Corp. of China Ltd. 2600ACH off 1.6%, Angang Steel Co. 347 ANGGF dropping 0.8%, and Jiangxi Copper Co. 358 JIXAY tumbling 3.9%.

Shanghai-listed shares of Aluminum Corp. 601600 fell 0.5%, while Angang Steel 000898 lost 0.8%, and Jiangxi Copper 600362 dropped 1.2%.

A fresh drop in iron-ore prices to just under $95 a tonne on Wednesday sent the Australian mining sector lower.

Iron-ore producer Fortescue Metals Group Ltd. FMG  FSUMF fell 5.1% while diversified producer Rio Tinto Ltd. RIO RIO moved 2.3% lower.

Among other movers, Daikin Industries Ltd. 6367DKILY fell 3.4% in Tokyo after the Nikkei reported that the firm is set to acquire air conditioner maker Goodman Global Inc. from private-equity firm Hellman & Friedman LLC for approximately 300 billion yen ($3.8 billion).

Marketwatch