Asia Stocks Gain Amid Fiscal Cliff Optimism

Asia stocks gained Wednesday amid sustained optimism for an agreement on upcoming U.S. tax hikes and spending cuts, and ahead of the conclusion of a Federal Open Market Committee meeting that may see the Fed undertake more asset buying.

Japan’s Nikkei Stock Average  rose 0.6%, while Australia’s S&P/ASX 200 index  added 0.5%, after Tuesday ending at its highest level since July 2011.

South Korea’s Kospi  advanced 0.3%, although the index moved off early highs after secretive neighbor North Korea reportedly launched a long-range rocket and successfully placed a satellite in orbit.

In Chinese trading, Hong Kong’s Hang Seng Index advanced 0.6% while the Shanghai Composite index traded fractionally higher.

The stage was set for gains in Asia after an unexpectedly strong reading for a gauge of German economic sentiment helped to lift European stocks on Tuesday, while U.S. stocks rose amid fresh hope for a deal to avoid billions of dollars of automatic spending cuts and tax hikes early next year.

“Investor sentiment towards the U.S. fiscal cliff is turning more positive,” said Matthew Sherwood, head of investment market research at Perpetual Investments. ”Investors thought a lack of public bickering between Republicans and Democrats meant the two sides are making progress,” he said.

The Federal Reserve wraps up its two-day monetary policy meeting later in the global day and the U.S. central bank may announce fresh asset purchases.

“Balance sheet expansion represents a dovish shift in [the Fed’s] monetary policy stance and is likely supportive for general risk sentiment,” said strategists at Barclays Capital.

The Hong Kong market reached a fresh 2012 high on Wednesday, with property firms seeing some buying. China Overseas Land & Investment Ltd.  , climbed 3%, while Sino Land Co.   advanced 1.3% in the sector.

Steel makers gained on news that China’s Baoshan Iron & Steel Co., or Baosteel , will raise prices in January, with Angang Steel Co.   jumping 3% and Maanshan Iron & Steel Co.   up 1.8%.

Baosteel shares rose 0.6% in Shanghai, while Angang Steel added 0.8% in Shenzhen.

Technology stocks were generally strong in Japan, as the dollar extended an advance that took the greenback to around the ¥82.50 mark on Tuesday.

TDK Corp.   rose 3.3%, while Toshiba Corp.   advanced 1.8%.

Canon Inc.  shares climbed 2.4% after a Nikkei report that the firm will cut costs by between ¥70 billion to ¥80 billion next year.

Panasonic Corp.  shares rose 3.4% after a separate Nikkei report that the firm is planning to sell the digital camera operations of subsidiary Sanyo Electric Co.

Exporting auto makers were also seeing some gains, with Mitsubishi Motors Corp.   up 7.6% after the Nikkei reported that the firm will end production in Europe, while Honda Motor Co.   moved higher by 1.4%.

The South Korean market was supported by gains for heavyweight Samsung Electronics Co. , which moved higher by 0.9%.

STX Pan Ocean Co.  surged 14.9%, extending a similar-sized gain made Tuesday on expectations that it could make an operating profit next year.

Kia Motors Corp.   fell 1.6%, however, and Hyundai Motor Co. declined 0.7%.

Cross-border deal making between Australian and Chinese companies helped some firms gain in the Sydney.

Mining giant BHP Billiton Ltd.   climbed 1.1% after it said it has sold its 8.33% interest in the East Browse Joint Venture and 20% interest in the West Browse Joint Venture, with both gas projects located offshore Western Australia.

The stakes were sold for $1.63 billion cash to a unit of PetroChina Co. . The Chinese energy giant traded up 0.8% in Hong Kong.

Rival Rio Tinto Ltd  climbed 0.7% after announcing that it will sell its 57.7% stake in the Palabora Mining Company Ltd. for $373 million to a consortium comprising South African and Chinese entities led by the Industrial Development Corporation of South Africa Ltd. and Hebei Iron & Steel Co. . Shares of Hebei were up 0.4% in Shenzhen.

Marketwatch