Commodity shares lead gains in Asia

Asia’s larger markets rebounded on Thursday, but sentiment was mixed as some investors bought commodity-related stocks on the back of rising prices while others worried about the impact of those prices on inflation in the US.

Technology stocks advanced, following Wall Street’s lead after Hewlett-Packard raised its annual forecast, while Tokyo’s bourse enjoyed the additional boost of a weaker yen, which was trading recently at 108.04, giving exporters a good run.

“We seem to be getting periodic positive numbers to show some reassurance to balance the scary headlines about subprime debt,” said David Cohen, head of Asian economic forecasting at consultancy Action Economics in Singapore.

Shares of technology companies in Japan and Korea especially rallied. Advantest shares surged 4.6 per cent to Y2,470, while TDK, trading in which has been volatile this week, jumped 4.5 per cent to Y7,940.

In Seoul, Samsung Electronics’ 2.7 per cent rally to Won594,000 led the Kospi up, which closed up 1 per cent at 1,704.36. LG Philips LCD gained 3.5 per cent to Won43,500.

The Nikkei 225 stock average rose 2.8 per cent to 13,688.28, while the broader Topix gained 2.5 per cent to 1,334.72. Metal-related companies were the outperformers in Tokyo, as higher prices for oil, gold and copper spurred investors to buy shares in companies doing business in those commodities.

Oil was trading around the $100 mark after hitting a high of over $101 in New York on Wednesday. Gold reached another record of $947.10. Sumitomo Metal Mining surged 15 per cent to Y2,175, the highest in almost a year.

Trading houses were beneficiaries of the higher metals and commodities prices. Mitsubishi Corp jumped 4.8 per cent to Y3,290, while Itochu rallied 2.5 per cent to Y1,170. Mitsui jumped 3.3 per cent to Y2,330.

Oil-related shares in Hong Kong gained but the Hang Seng index’s morning gains slipped away in the afternoon. The index closed up 0.1 per cent at 23,623.00, while the shares of mainland Chinese companies traded in Hong Kong, or H shares, closed slightly higher.

CNOOC, a Chinese oil and gas exploration and production company, advanced 1.6 per cent to HK$12.96, while PetroChina gained 1.4 per cent to HK$11.86. HSBC rose 1.3 per cent to HK$114.2, while China Life added 0.3 per cent.

Australian stocks also rebounded from Wednesday’s declines, aided by strong earnings from Brambles and Telstra. The S&P ASX advanced 1.6 per cent to 5,583.4.

Brambles, a storage and pallet producing company, surged 4.6 per cent to A$9.75 after it said first-half profit jumped 19 per cent and expected “solid” profits for the full year.

Telstra, Australia’s biggest telecommunications company, reported a 13 per cent rise in profit, which lifted its shares 4.8 per cent to A$4.79.

Australia’s Woodside Petroleum, another oil and gas producer, advanced 2.5 per cent to A$54.95.

Shanghai shares fell, closing down 0.9 per cent to 3,054.81. Shanghai Pudong Development Bank continued to drop after news it was planning a $5.6bn share sale. The stock slumped 6 per cent to Rmb43.23, after dropping by its daily limit of 10 per cent on Wednesday.

Shares in Mumbai were up 0.5 per cent at 17,706.60, while the Straits Times in Singapore closed up 0.9 per cent at 3,054.81.