India leads Asian equity markets higher

Asian stocks moved mostly higher on Tuesday, although the strong momentum of recent sessions faded as investors booked profits.

Indian shares were the star performers, as banking issues surged following a strong response to a follow-on share sale by ICICI Bank. ICICI said the $4.9bn domestic portion of its new issue sold out within an hour of opening. The bank set an indicative price band of between Rs885-Rs950, and was expected to price the issue at the top of the range.

Shares in ICICI Bank rose 2.9 per cent to Rs944.40, while rival State Bank of India climbed 4.1 per cent to Rs1,372.40 and HDFC Bank added 1.1 per cent to Rs1,099.90.

This helped the Sensex index climb 1.5 per cent to 14,295.50, the best performing of the region’s equity markets.

Reliance Industries rose 1.8 per cent to Rs1,702 after Goldman Sachs raised its price target on India’s biggest company from Rs1,660 to Rs2,060 due to higher earnings potential from the company’s gas exploration business.

Japan’s rally stalled as investors took profits in the property sector. The Nikkei 225 inched up 0.1 per cent to 18,163.61, but the broader Topix closed 0.4 per cent lower at 1,780.49.

The warehouse and wharf sector – bid up recently because of the its large property holdings – dropped 2.1 per cent. Sumitomo Warehouse, one of Japan’s biggest warehouse groups, plunged 3.7 per cent to Y854. Investors began to harbour doubts about property-related stocks, whose prices have been lifted to what some see as unsustainably high levels over the past year.

Export-focused stocks weathered an overnight drop in US shares – a sign that underlying confidence in international companies remained high. Nikon, the digital camera maker with a strong export bias, rose 2.9 per cent to Y3,510 after Daiwa Institute of Research raised its rating.

Shipping was the fastest falling sector, down 2.4 per cent, reflecting overvaluation fears after a stellar performance over much of the past year. Nippon Yusen, Japan’s biggest shipper, declined 1.5 per cent to Y1,143.

No such fears were evident in Seoul, whose shipbuilding sector kept South Korea’s benchmark Kospi index afloat in the wake of profit taking among brokerage stocks. Hyundai Heavy Industries rose 5.2 per cent to Won342,000, a new record, after Korea Investment & Securities raised its target price to Won500,000 from Won355,000. The broker said it expected rising demand for vessels would drive prices higher. After the close HHI said it had received a $924m order to build eight container vessels.

Rival Samsung Heavy Industries climbed 3.5 per cent to Won46,450.

The Kospi ended fractionally higher at 1,807.85 having earlier hit its fourth straight record high.

Brokerage companies retreated from a recent rally inspired by new legislation that would, if passed, ease regulations in the sector. Daewoo Securities shed 4.8 per cent to Won34,050.

Indonesian plantation stocks recovered a day after the country’s government announced it was raising tax on exports of palm oil. In spite of falling palm oil prices, Sampoerna Agro rose 3 per cent to Rp2,600.

The Jakarta Composite index rose 0.7 per cent to 2,142.19, its third successive closing high.

Sydney’s ASX 200 index rose 0.5 per cent to 6,372 helped by Woodside Petroleum, the country’s biggest energy company, on speculation it could receive a takeover approach from Royal Dutch Shell, which holds a 34 per cent stake. Woodside rose 2 per cent to A$46.84.

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