Asian markets ended mostly higher Monday, with bargain-hunting in the property sector helping lift Hong Kong's benchmark index, while the Nikkei edged up 0.4%.
Many markets saw sharp gains fade in late trade on caution ahead of the Federal Reserve's decision on interest rates Wednesday and uncertainty over the health of the economy in the second half.
Japan's Nikkei 225 ended 0.4% higher at 9826.2, Hong Kong Hang Seng ended up 0.8% and South Korea's Kospi added 1.2%. Australia's S&P/ASX 200 rose 0.5%, and Shanghai's Composite index gained 0.6%.
In late trading, Singapore shares were flat and India's benchmark index was down 1.3%.
"Investors still lack incentives to chase up stocks," said Marco Mak, head of research at Tai Fook Securities. He said some of the gains were a rebound from declines last week that saw markets such as Tokyo slide 3.5%, marking its worst weekly performance in three months.
"The economy may have hit bottom, but there's still a question mark about third-quarter demand," said Taiwan International Securities' Andrew Teng.
Nissan Motor rose 5.6% after the Nikkei reported the car maker plans to mass produce electric cars in the U.S. by 2012. But oil and commodity stocks fell in Tokyo with Inpex down 2.4%, Itochu off 1.5% and Nippon Yusen 1.2% lower.
Tachibana Securities analyst Kenichi Hirano said the stock market's two major concerns were "whether the real economy can catch up with share prices and whether the current liquidity can continue."
In Hong Kong, debutante China Metal Recycling ended up 22% from its IPO price. Analysts said the share benefited from reinvigorated investor appetite for new listings and an upbeat view on the company's prospects, given its market-leader status.
"The market focus is now on newly listed companies," said Alex Tang, head of research at Core-Pacific Yamaichi in Hong Kong.
Monday also saw a successful IPO from furniture maker Hing Lee Holdings, which placed 35 million shares.
Bargain-hunting spurred gains in the Hong Kong real-estate sector. Cheung Kong rose 3.4% after falling 5.9% in the past five sessions, and Sino Land ended 1.6% higher after shedding 6.4% over the same period.
Sun Hung Kai Properties rose 3.4% after the Standard reported the company generated 100 million Hong Kong dollars (US$12.8 million) over the weekend from the sale of five premium residences at Sky One, the second phase of its Peak One project.
In Sydney, shares of BHP Billiton were up 1.6%, Fortescue up 5.4%, Origin Energy 1.3% higher and Rio Tinto down 1.4%.
National Australia Bank gained 1.8%. The company said Monday it had agreed to buy Aviva's Australian wealth management business for A$825 million.
Technology shares supported gains in Korea after a rise in their U.S. peers Friday, with Samsung Electronics up 2.3% and LG Electronics up 2.2%.
In currency trading, the euro was lower against the U.S. dollar and the Japanese yen. The euro was at $1.3862 from $1.3948 late in New York on Friday, though off a low of $1.3886. Against the yen, the dollar was trading at 95.94 yen, from 96.23 yen.
Spot gold was down $2.10 cents from New York on Friday, at $931.60 a troy ounce. "Gold is in a lull, and might go lower," said Jonathan Barratt, managing director at Commodity Broking Services.
Still, analysts at UOB KayHian said there were signs economic activity in the OECD could be about to turn upward, and this should drive the next phase of metals restocking, as early as the third quarter of 2009. "Although there is likely to be a period of weakness in commodity prices from potentially weaker China imports, early signs of recovery in the developed economies will likely trigger a new round of re-stocking, particularly when interest rates remain low."
July Nymex crude, which expires Monday, was down 37 cents at $69.18 a barrel on Globex, having fallen $1.82 Friday.
Crude was likely to trade a range from the high $60s to the low $70s in the early part of the week, before taking its cue from the U.S. weekly petroleum report, said David Moore, a strategist at Commonwealth Bank of Australia. "Prices have been a bit soft, which is surprising as there's been some news around that probably would have been supportive of oil at other times."
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