Asia rallies with Tokyo in lead, but Shanghai lags
HONG KONG (MarketWatch) -- Asian markets were broadly higher Friday, with Japan's Nikkei ending at its highest level in over three months as the yen continued to weaken, while
Piper Jaffray sales trader Andrew Sullivan in Hong Kong said regional markets also got a boost as traders closed out short positions ahead of the weekend amid improving investor sentiment over the short-term outlook.
"Stimulus expectations are being managed as investors realize that we are in the holiday period and the chance of any action is limited," Sullivan said.
He added that investors appear resigned to the fact that coordinated action to bolster asset markets might not be forthcoming from global monetary authorities until September.
Also helping to boost stocks in Tokyo, the Japanese government forecast nominal economic growth outpacing real growth in the fiscal year ending March 2014, marking a reversal of deflationary trends in place for 16 years.
In late Friday trade the Asia Dow was up 0.1% at 2,721. Japan's Nikkei Stock Average (100000018) climbed 0.8%, rising further after its 1.9% jump the previous day, as waning expectations for quantitative easing from the U.S. and remarks from European leaders weakened the yen, thus aiding exporters.
Sumitomo Mitsui Trust Group Chief Investment Officer Masashi Oda said that while Japanese corporate earnings forecasts continue to be revised down, many stocks were still good buys.
"The Japanese equity market still offers attractive investment opportunities, and we strongly believe that current share prices do not reflect the healthy fundamental position that most companies enjoy," Oda said.
Friday's gains followed an overnight rally for U.S. shares, helped in part by German Chancellor Angela Merkel's comment Thursday that her nation will do whatever it can to keep the euro. Read more on Merkel comments.
In the wake of the remarks, Japanese financials were generally trading higher, with
The comments also helped the yen ease lower, as the euro (EURJPY) rose above the ¥98 level, and as weakness in Japanese bond yields helped the dollar (USDJPY) advance to above ¥79. Read more on currencies.
Japanese techs also got a lift from the strong advance in their U.S. peers, with the tech-heavy Nasdaq (COMP) closing 1% higher.
Over in Seoul, heavyweight Samsung Electronics Co. (SSNLF) fell 3.8%.
A judge hearing Samsung's patent dispute litigation with Apple reportedly said there were risks for both sides if the case went to verdict.
Also pressuring the broader Korean market, LG Electronics Inc. shed 2.5%.
However, Chalco's mainland-China listed shares shrugged off the result, finishing up 0.7%.
Mainland Chinese shares underperformed the region, as weak economic data remained as a weight on sentiment, with investors also shrugging off recent remarks from Premier Wen Jiabao suggesting more monetary policy action.
The Shanghai Composite Index edged up 0.1%, trimming this week's loss to 2.5%. The Shenzhen Composite Index ended Friday's session 0.3% lower.
"The message from the Shanghai Composite is that monetary policy may be becoming less tight, but it is not accommodative," said Prakash Sakpal, an Asia economist at ING Financial Markets Research.
In other action, Australian shares gained, as earnings took center stage in Sydney.