Banks lead charge on Japan boost

JAPANESE stocks were boosted by official figures showing better-than-expected economic growth in the second quarter.

While investors in some Asian markets were sitting tight ahead of the US Federal Reserve's interest rate verdict later today, the Nikkei 225 Average rose 77.01 points to close at 9564.81, up 0.8%. Data released before the market open showed Japan's gross domestic product grew 0.6% in the quarter to June.

It was the sixth straight quarter of growth and well above consensus forecasts. Still, it did not do much to dispel fears of continued deflation, which have dogged the economy for so long.

Banking, retail, real estate and other sectors dependent on domestic demand all gained.

UFJ, Japan's fourth-largest bank, rose 5.3% to 237,000 yen ahead of its announcement of quarterly bad loans. The country's second-largest real estate developer, Mitsubishi Estate, put on 2.48% to 910 yen. Exporters were also beneficiaries, with carmaker Honda rising 1.9% to 4740 yen.

In Hong Kong, stocks were slightly higher but on low volumes as investors waited for earnings reports - notably from China's largest mobile phone operator, China Mobile. It extended gains on expectations of 16% year-on-year net profit growth. The stock gained 0.3% to HK$19.55.

Retailers and hoteliers were also on the up as the territory's tourists begin to come back although Hongkong & Shanghai Hotels, which owns the Peninsula Hotel next to the Star Ferry, was down 0.6% at HK$4.30 after it had risen to a two-year high.

Global fashion retailer Esprit Holdings fell 0.3% to HK$19.40 but airline Cathay Pacific rose 3.4% to HK$12.05 on expectations that the worst effects of the killer Sars virus, which saw passenger numbers nosedive, may now be behind it. The Hang Seng index was up 90.6 points at 10,184.2.

Banks and blue-chips led the way higher in healthy volume in Singapore, where the Straits Times index was up 10 points, at 1563.6.

Conglomerate SembCorp's strong profit growth, announced after the market's close yesterday, was rewarded with a 1.4% rise to S$1.40. The company is benefiting from stronger gas and electricity sales.

Singapore Airlines was stronger, up 1.9% at S$10.80, while United Overseas Bank gained 1.5% to S$13.20 and banking firm DBS Group was up 0.9% to S$11.20.

In Sydney, Australian stocks held steady ahead of the Fed's meeting in Washington. The All Ordinaries index was up 6.4 points, at 3142.9. It has been buoyant on positive corporate earnings results although there is a lingering nervousness about the health of the global economy.

Long-suffering investors in poker-machines maker Aristocrat Leisure were rewarded with an 8.3% gain to A$1.70. Concerns over market saturation and new regulations in the US have wiped 60% off the stock this year. But the market was satisfied with the company's half-year results which, although showing a loss, were in line with forecasts.

Media giant News Corp also performed well. It is expected to post strong quarterly profit figures tomorrow and the shares rose 0.9% to A$12.19.

Resources took a breather after a hectic fortnight. Mining giant BHP Billiton was up just 0.2% at A$10.07 while rival Rio Tinto added 0.3% to A$31.99.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.