Asian shares rise after Wall Street rally

HONG KONG, (AFP) - Asian shares rose on Wednesday as traders were buoyed by gains on Wall Street while also picking up undervalued stocks following the previous day’s heavy losses.

Investors, who went into sell-off mode Tuesday after Standard & Poor’s lowered its outlook on United States sovereign debt, took heart from strong earnings from US giants such as Intel and IBM.

Tokyo rose 1.76 percent, or 165.79 points, to 9,606.79 and Hong Kong gained 1.60 percent, or 375.10 points, to 23,896.10.

Seoul closed 2.23 percent, or 47.23 points, stronger at 2,169.91 and Sydney ended 1.37 percent, or 65.7 points, up at 4,859.0. Shanghai rose 0.27 percent, or 8.00 points, to 3,007.04.

The Dow Jones Industrial Average ended 0.53 percent up on Tuesday, fuelled by a better-than-expected report from healthcare giant Johnson & Johnson as well as an upbeat outlook from investment bank Goldman Sachs.

Intel and IBM also announced first quarter results that came in above forecasts, lifting Asian tech shares.

“US debt concerns, US currency weakness and the potential inflationary impact are situations that are going to continue to overhang financial markets,” Shaw Stockbroking head of trading Jamie Spiteri told Dow Jones Newswires in Sydney.

“But I believe markets have been absorbing some of those concerns prior to the immediate impact that was realised (Tuesday),” he said.

Global stocks were sent diving after S&P challenged Washington’s gold-star “AAA”-rated standard by lowering its outlook for the first time to “negative” from “stable”, warning that politicians seemed unable to agree a plan to reduce the huge budget deficit.

The US earnings and a slump in Japan’s trade surplus caused by last month’s devastating earthquake sent the dollar higher against the yen.

The greenback rose to 82.81 yen from 82.57 in New York Tuesday, while the euro bounced to $1.4423 from $1.4334 and to 119.41 yen from 118.35.

However, the euro was under pressure as traders continued to fret over sovereign debt in the eurozone, which has seen bailouts for Greece and Ireland and Portugal also call for help.

In oil markets ongoing worries about unrest in the crude-rich Middle East and North Africa sent prices higher.

New York’s main contract, light sweet crude for delivery in June rose 83 cents to $109.11 a barrel, while Brent North Sea crude for June gained 60 cents to $121.93 in the afternoon.

Gold closed at a record high $1,500.00-$1,501.00 an ounce in Hong Kong as dealers looked for the safe haven asset amid concerns over eurozone debt, the Middle East unrest and global inflation.

In other markets:

-- Taipei rose 2.02 percent, or 174.73 points, to 8,813.28.

Taiwan Cement rose 7.0 percent daily limit at Tw$40.15 while Taiwan Semiconductor Manufacturing was 2.5 percent higher at Tw$69.8.

-- Manila gained 0.70 percent, or 29.56 points, to 4,274.77.

Conglomerate Alliance Global Group rose 2.8 percent to 11.72 pesos, Philippine Long Distance Telephone was up 0.9 percent at 2,390 and property developer Megaworld added 4.7 percent to 2.44.

-- Wellington closed up 0.95 percent, or 32.83 points, at 3,472.81.

Telecom gained 4.9 percent to NZ$2.155, Fletcher building rose 0.3 percent to NZ$9.08 and Air New Zealand was flat at NZ$1.10.