Asian shares extend gains after US data

HONG KONG: Asian stock markets rose for a second straight day on Tuesday after another Wall Street rally following a better-than-expected batch of US retail data.

A slight rebound in confidence and some rare good news from Greece's banking sector also boosted risk sentiment, providing support to the euro and dollar, while oil prices edged up on hopes for demand growth in the United States.

Tokyo rose 1.53 percent by the break, Hong Kong surged 2.12 percent, Sydney added 0.76 percent and Shanghai climbed 0.95 percent while Seoul was 1.05 percent higher.

The advances extended gains from Monday, when dealers were cheered by comments from US Federal Reserve chief Ben Bernanke that stopped short of fresh stimulus for the US but left the door open for measures further down the line.

On Monday the US Commerce Department reported that consumer spending, a pillar of the world's largest economy, rebounded 0.8 percent in July, after a 0.1 percent dip in June, the fastest pace since February.

The data sent Wall Street higher. The Dow jumped 2.26 percent, the S&P 500 surged 2.83 percent and the Nasdaq shot up 3.32 percent.

Dealers will now be looking to the release of key jobs data from the United States, which will provide a better idea of the state of the economy.

"Signs of a market-based and economic recovery are in the wind as a turbulent month draws to a close," Ben Le Brun, market analyst at CMC Markets in Sydney, said.

Global markets have suffered a torrid August, with massive selling as the United States' credit rating was downgraded, eurozone debt fears continued to weigh and economic indicators pointed to a possible new worldwide recession.

On the forex market the dollar held steady at 76.88 yen in Tokyo morning trade, marginally up from 76.83 yen in New York late Monday.

The euro fetched $1.4516 after $1.4510, and 111.59 yen compared with 111.52 in New York.

In Tokyo the reaction to finance minister Yoshihiko Noda's election as ruling Democratic Party of Japan leader, and likely next prime minister was limited, said Yumi Nishimura, deputy general manager at Daiwa Securities.

"But the market is cautiously optimistic that his administration will be able to foster better relationships with opposition parties compared to his predecessors," she told Dow Jones Newswires.

Meanwhile there was some positive news from Europe, where the sovereign debt crisis has been weighing on market sentiment.

Two Greek banks, Alpha Bank and Eurobank, announced that they were merging and receiving a sizable Qatari investment, the first bit of good news from Greece's banking sector for some time.

Currency rates were unmoved by data Tuesday showing that Japan's jobless rate stood at 4.7 percent in July, up 0.1 percentage point from the previous month, excluding figures from the disaster-hit northeast of the country.

On oil markets New York's main contract light sweet crude for October delivery added 22 cents to $87.49 a barrel and Brent North Sea crude for October delivery gained 29 cents to $112.17.

Gold opened at $1,798.00-$1,799.00 an ounce in Hong Kong, down from Monday's close of $1,821.00-$1,822.00.

Copyright AFP (Agence France-Presse), 2011