Asian shares up but China inflation hits Shanghai

HONG KONG: Asian stocks mostly rose on Wednesday, but Shanghai and Hong Kong slipped after data showed China's inflation eased only moderately, while a weaker yen sent Tokyo higher.

Technology plays were in positive territory after Microsoft announced it would buy Internet phone pioneer Skype.

Shanghai finished 0.25 percent, or 7.21 points, lower at 2,883.42 after swinging in and out of positive territory during the day, while Hong Kong closed 0.19 percent, or 44.20 points, off at 23,291.80.

Tokyo ended 0.46 percent, or 45.50 points, higher at 9,864.26 while Sydney added 1.15 percent, or 54.4 points, to close at 4,780.2 and Seoul gained 1.28 percent, or 24.46 points, up at 2,166.63.

Shanghai and Hong Kong were up and down after Beijing said inflation edged down to 5.3 percent in April, slightly off the 32-month high 5.4 percent seen in March but higher that forecasts of 5.2 percent.

However, fixed asset investment, a measure of government spending on infrastructure, rose 25.4 percent year on year in the first four months of 2011, suggesting the world's number two economy was still robust.

Retail sales, the main gauge of consumer spending, rose 17.1 percent in April from a year ago.

The figures provided a mixed message and are unlikely to ease concerns of fresh monetary tightening by Beijing as it tries to keep price rises at its target of four percent for the whole year.

China has raised interest rates four times since October and issued numerous orders for banks to set aside more of their deposits as reserves, amid concerns that rising prices could cause social unrest.

"The market lacks strong upward momentum as inflation remains high while the economy is cooling," Capital Securities analyst Li Bin told Dow Jones Newswires.

Markets were extending broad gains on Tuesday amid rising confidence in the global economy and following a 0.60 percent rise on the Dow and a hike of 0.81 percent on the S&P 500.

The tech-rich Nasdaq jumped 1.01 percent, boosted by Microsoft's $8.5 billion cash purchase of Skype, its largest-ever acquisition.

Tokyo was lifted by hopes for upcoming earnings results from Toyota and the weakening yen.

After the market had closed Toyota announced that net profit almost doubled in the year to March. It also said its production would begin to "normalise" from June onwards, earlier than previously thought as the automaker grapples with the impact of the March 11 quake and tsunami.

In afternoon trade the yen slipped to 80.82 against the dollar from 80.37 yen late Tuesday in New York.

The Japanese unit edged down to 116.44 versus the euro from 116.54. The euro fetched $1.4401, compared with $1.4410 in New York.

The euro managed to hold up as the European Union, International Monetary Fund and European Central Bank began an audit of finances and reforms in Greece to determine if it merits a critical new slice of funding from a bailout agreed last year.

The meeting came as a top ECB official warned that a debt default or restructuring for Athens would hit the entire eurozone.

A restructuring would put Greece's banking system "on its knees," Lorenzo Bini Smaghi told the Italian daily La Stampa.

On oil markets New York's main contract, light sweet crude for delivery in June, was up 24 cents to $104.12 a barrel in afternoon trade.

Brent North Sea crude for June delivery climbed 19 cents to $117.82.

Gold closed at $1,523.30-$1,524.30 an ounce in Hong Kong up from Monday's finish of $1,506.00-$1,507.00. Gold markets were closed on Tuesday.

In other markets:

-- Taipei ended flat, edging down 2.88 points to 9,020.40.

TSMC rose 0.81 percent to Tw$75.0 while China Airlines fell 1.04 percent to to Tw$19.0.

-- Manila gained 0.74 percent, or 31.91 points, to close at 4,335.04.

DMCI Holdings gained 6.8 percent to 48.00 pesos and JG Summit was up 4.1 percent at 28.00 but San Miguel fell 1.3 percent to 114.50.

-- Wellington closed 0.85 percent, or 30.12 points, higher at 3,558.87.

Sky City added 1.1 percent to NZ$3.75 and Telecom jumped 3.1 percent to NZ$2.31 while Ryman Healthcare was 0.8 percent at NZ$2.61.