Australian mining stocks gained on hopes that Julia Gillard, the country’s new prime minister, will seek a compromise on the controversial super profits tax that has recently weighed on the sector.
BHP Billiton gained 1.3 per cent to A$39.65 as the world’s largest mining company said it was encouraged by the appointment of Ms Gillard and had asked its advertising agencies to suspend all advertisements that it was running against the proposed tax.
“The market will be closely watching developments on the resource super profits tax as prime minister Gillard starts negotiations with the miners,” said David Taylor, of CMC Markets.
“Australia’s new leader will be less onerous to the mining companies than the proposal announced earlier – the market is expecting a change,” added Tim Leung, of IG Investment.
Rio Tinto, the world’s third-biggest mining company, advanced 1.7 per cent to A$71.73, Iluka Resources rose 2.4 per cent to A$4.80 while Murchison Metals increased 1.4 per cent to A$2.24.
Elsewhere in the region, Asian stocks steadied after the previous day’s sharp sell-off prompted by fears of a slowdown in the global recovery on disappointing US homes sales figures.
“It’s not as if investor sentiment has worsened dramatically but gains look limited as there’s uncertainty about the outlook for the global economy,” said Yutaka Miura, of Mizuho Securities.
The FTSE Asia-Pacific index edged forward 0.1 per cent yesterday to 224.49 as investors marked time digesting the global economic data. “There seem to be a lot of mixed signals coming from the US,” added Mr Leung.
Seoul was the best performer among the leading Asian indices as the Kospi index rose 0.8 per cent to 1,739.87 – an eight-week closing high – on gains for shipping companies and builders.
Hanjin Shipping gained 4.3 per cent to Won37,900 and Hyundai Merchant Marine rose 3.1 per cent to Won33,600 on expectations of a business turnround.
Construction companies also advanced, GS Engineering & Construction climbing 3 per cent to Won82,900 and Daewoo Engineering & Construction jumping 6.8 per cent to Won11,000.
Sports utility vehicle maker Ssangyong Motor jumped by its daily limit, surging 14.8 per cent to Won15,150 on expectations of an acquisition.
Carlos Ghosn, chief executive of Renault-Nissan, one of the bidders for the South Korean carmaker, said its interest lay in Ssangyong’s plant capacity.
In Tokyo, the Nikkei 225 Average rose slightly by 0.1 per cent to 9,928.34, holding above a key support level in choppy trade after losing 3 per cent in the previous two sessions.
Firm support is seen at 9,800, about the level of the Nikkei’s 25-day moving average – a proxy for a one-month moving average that is closely watched in Japan.
The broader Topix slipped 0.1 per cent to 879.77.
Exporters lost ground but companies that depend on domestic demand such as property found favour.Sumitomo Realty & Development gained 2.9 per cent to Y1,672, the top percentage gainer on the Nikkei.
Hong Kong’s Hang Seng index sank 0.6 per cent to 20,733.49, dragged down largely by index heavyweight HSBC, which fell 1.5 per cent to HK$75.25.
Mainland stocks edged back slightly. The Shanghai Composite fell 0.1 per cent to 2,566.75, the same percentage fall as the S&P/ASX 200 in Sydney, which slipped to 4,479.70.
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