Asian stocks end mixed after Fed rate rise

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Markets in the region put in mixed performances on Wednesday in the wake of the US Federal Reserve's widely-expected 25 basis point rise in interest rates and a subsequent rally on Wall Street.

Tokyo moved higher as investors reacted positively to the latest twist in Japan's mega-bank merger story.

The Nikkei 225 average climbed 0.9 per cent to 11,049.46 while the Topix index was up 1.5 per cent at 1,121.11.

Shares in big banks finished higher after a court ruling announced an hour before the market close opened the way for UFJ and MTFG to continue full merger negotiations.

Japan's high court cancelled an injunction granted by a lower court that prevented UFJ from talking to MTFG about its trust bank. The injunction was granted after Sumitomo Trust & Banking said UFJ had pulled out of a previous legally binding agreement to sell its trust bank.

UFJ rose 5.2 per cent to Y487,000 and MTFG climbed 6.9 per cent to Y1,020,000, but Sumitomo Trust fell 3.8 per cent to Y633. SMFG, which has made a rival bid for UFJ that could yet leave Sumitomo Trust to buy UFJ Trust, rose 1.3 per cent to Y645,000.

Blue chip manufacturers moved higher on Fed-inspired hopes that demand from the US, a key export market, would remain firm in coming months, despite last week's disappointing employment data.

Among car makers, Honda climbed 3.1 per cent to Y5,280, Nissan was up 2 per cent at Y1,160 and Toyota gained 3.2 per cent to Y4,260.

Canon, meanwhile, rose 1.8 per cent to Y5,180, Hitachi was 1.5 per cent higher at Y665 and NEC added 0.9 per cent to Y682.

Shares in JFE, Japan's second biggest steel group, rose 3.4 per cent to Y2,705 after the group said it was examining the possibility of building a steelworks in China in co-operation with Guangzhou Iron & Steel Enterprises.

Bridgestone rose 2.4 per cent to Y1,988 after the tyremaker boosted its net profit forecast for the year to March by 39 per cent to Y104bn.

Jakarta finished higher as optimism about a stronger US economy steadily lifted blue-chips and dollar-earning companies.

The composite index jumped 1.5 per cent to 763.95.

IndoSat, Indonesia's second-largest telecom provider, climbed 5.6 per cent to Rp4,275 while Medco Energi, the oil and gas company, soared 21.57 per cent to Rp1,550 on the back of higher oil prices.

Bangkok finished near a three-month low amid renewed concerns about the impact of a possible rise in domestic interest rates on non-performing loans.

The SET index shed 1.9 per cent to 595.60, its worst close since May 18, as turnover improved to Bt13.8bn from Tuesday's Bt7.5bn.

Krung Thai Bank, which unveiled a sharp increase in bad loans at the end of June, tumbled 8.4 per cent to Bt7.65, while Bangkok Bank fell 2.8 per cent to Bt87.

Expectations that the Bank of Thailand would raise rates later this month were heightened by the US Federal Reserve's decision to lift the cost of borrowing again on Tuesday.

Taipei went into reverse after initially moving higher following the US Federal Reserve's positive comments. The weighted index closed down 0.5 per cent at 5,367.34.

Au Optronics, the flat screen producer, slipped 1 per cent to T$38.80 while Taiwan Semiconductor Manufacturing, the world's largest contract microchip manufacturer, extended the previous session's gains by another 1.2 per cent at T$43.80.

Hua Nan Financial Holding, the day's most active financial stock, lost 0.8 per cent to T$25.40.

Hong Kong was undermined by weakness in China-related stocks as investors remained jittery about austerity measures aimed at cooling down the mainland's economy.

The benchmark Hang Seng index fell 0.5 per cent to 12,343.13, while the index of China Enterprise stocks, better known as H-shares, retreated 2.5 per cent to 4,048.86.

Sinopec Shanghai Petrochemical, tumbled 8.6 per cent to HK$2.40 while Aluminium Corp of China fell 2.9 per cent to HK$3.35.

Cathay Pacific Airways fell 4.6 per cent to HK$13.35 after the carrier reported disappointing first-half profits and highlighted rising fuel costs.

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