Gold gleams for Aussie miners

AUSTRALIAN mining stocks gleamed as the price of bullion hit two-and-a-half-year highs, and other Asian markets moved higher after surprisingly strong consumer durable sales in the US in April promised to boost their exporters.

Tokyo stocks were the exception and failed to repeat yesterday's attacks on year highs. Shares in the giant Nippon Telegraph & Telephone group were battered after its credit rating was downgraded by Moody's Investor Services, and the Nikkei 225 Average slipped 3.57 points to 11,976.28.

Heavy buying of gold on world markets by investors spooked by fears of hostilities between India and Pakistan and threats of further terrorist attacks in the US saw Sydney investors chasing local gold producers.

The potential profits to be made from the 15% rise in the gold price over the past year lifted shares in Australia's gold miners by as much as 3%, with Newcrest Mining, Lihir Gold and Aurion Gold leading the rally. Bank shares also strengthened as investors chased value rather than growth, but a slide in News Corp shares limited the All Ordinaries gain to 13.5 at 3338.3.

Trading in Tokyo was subdued ahead of the crucial earnings report from the big banks, which had a mixed morning as profit-takers moved in after a recent rally.

Falls of up to 2% hit Mizuho Holdings, Sumitomo Mitsui Banking, Mitsubishi Tokyo Financial Group and UFJ, which are expected to reveal some savage write-offs on their bad loans.

After hours, UFJ kicked off the parade of woe by unveiling losses of 1.23 trillion yen (£6.8bn) for the year to end March.

Carmakers were lifted from the recent slump, inspired by a US Commerce Department report that sales in April were well above expectations. The report also provided a tonic for Hong Kong's exporters, which are heavily dependent on their US sales, and the Hang Seng index nudged ahead 2.03 to 11,626.78, but the overall market was held back by a 3% fall in shares of Legend Holdings. China's locally quoted computer giant disappointed with sales and earnings figures that failed to meet analysts' targets.

Warnings from Sun Microsystems of a fall in first-quarter sales did not dampen the enthusiasm of Taiwan investors, who moved in on recently savaged technology stocks and took the Weighted Average index up a sturdy 156.44 points to 5706.40.

Buyers in South Korea were stocking up bank stocks which are expected to receive improved ratings from the credit agencies in the light of better economic performance and continuing reforms. Local telecoms stocks also made gains, and the Kospi index added 9.06 to 854.57. Reports that the Singapore government is to loosen the controls on shareholdings in media groups boosted shares of the dominant Straits Times publisher Singapore Press Holdings by 1.5% on the prospects of big foreign institutions raising their stakes in the group.

A rally in bank shares also helped lift the Straits Times index 4.53 points to 1722.31.

While other South-east Asian markets scored modest gains, Malaysian investors fretted about the local economy, and the Kuala Lumpur Composite index fell 1.73 points to 765.86.

Thailand's SET index fell 0.76 to 394.33 and the Jakarta Composite index was 3.29 points ahead at 506.95.

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