Asia Up on Europe, Australia

By SHRI NAVARATNAM

SINGAPORE -- Asian stock markets were higher Wednesday, with Australian shares getting a lift from better-than-expected earnings.

Expectations that European Union members are working towards helping fiscally-stressed Greece were encouraging buyers back into the market after several days of uncertainty over euro-zone debt problems. Tachibana Securities operating officer Kenichi Hirano said the Greece news was lifting sentiment in Tokyo. "The market knew that sooner or later, there would be a rescue plan, because Europe couldn't just abandon Greece," he said, referring to the prospect of an imminent rescue deal for Greece.

Germany is considering a plan with its European Union partners to offer Greece and other troubled euro-zone members loan guarantees in a bid to calm fears of a government default and prevent a widening of the credit woes in the euro-zone, people familiar with the matter said.

Japan's Nikkei 225 was up 1.0%, Australia's S&P/ASX 200 was 1.0% higher, South Korea's Kospi Composite advanced 0.3% and New Zealand's NZX-50 rose 0.5%. Dow Jones Industrial Average futures were 12 points higher in screen trade.

The Australian market was rising on the back of better-than-expected results from mining giant BHP Billiton and hopes of a resolution to Greece's fiscal travails.

BHP rose 2.2% after its underlying first half net profit of US$5.7 billion beat consensus estimates. Rio Tinto tacked on 3.6%, riding BHP's surge.

Boral rose 4.5% after a stronger-than-expected first half net profit, while CBA rose 0.9% after its first half net profit met expectations. "The earnings season in Australia is fantastic," said IG Markets institutional dealer Chris Weston. "Companies are boosting dividends and there's a lot of positive comments on earnings."

Shipping and resources stocks were driving Tokyo shares higher, underpinned by gains in commodities on Tuesday.

Nippon Yusen advanced 2.5%, Mitsui O.S.K. Lines rose 3.0% and Itochu gained 1.7%.

Toyota Motor was up 0.7% as investors continued to bargain hunt following sharp falls recently. The small gains came despite the automaker's announcement Tuesday of a global recall of nearly half a million of its Prius hybrid vehicles to resolve a problem with their brakes. The fresh setback comes on top of the automaker's recent recall of around eight million vehicles in the U.S. and Europe to fix problematic gas pedals.

New Zealand shares were trading higher on an improvement in sentiment, but Craig Investment Partners broker Bryon Burke said buyers weren't rushing into the market.

"There's no commitment on the buy-side. I don't see it going further north anyway," he said.

Coal exporter Pike River Coal rose 4.6% on stronger commodity prices and on indications the New Zealand government may open conservation land to mining.

Blue chip stocks were pushing higher, led by bellwether Telecom rising 0.9% and Fletcher Building tacking on 0.7%. Property companies took a breather after Tuesday's relief rally that was driven by news the government will not impose a land tax. AMP Office Property Trust was down 2.6% and Kiwi Income Property fell 1.9%.

The South Korean market was supported by gains in financial and steel stocks, although some brokers said it was unclear how far the market will rebound.

"Sentiment looks to have stabilized," said Min Sang-il at E*Trade Securities. "But the market still lacks confidence about whether the stock market will stabilize soon, preventing any meaningful rebound."

In foreign exchange markets, the euro remained bid on expectations of a Greek rescue package. The euro was fetching $1.3794 against the dollar, up from $1.3779 late in New York Tuesday, and was at ¥124.03 against the yen compared with ¥123.52. The dollar was buying ¥89.92 from ¥89.63.

"Investors are hopeful that Thursday's EU Leaders Summit...may help shed a bit more light on how policymakers are planning to tackle Greece's escalating debt crisis. Europe's fiscal woes are likely to remain the key focus for (the euro) near term," said Danica Hampton, currency strategist at the Bank of New Zealand.

Japanese government bond futures were down, tracking Tuesday's weaker U.S. Treasurys. Lead March JGB futures were down 0.15 at 139.18 points.

Spot gold was at $1,078.80 a troy ounce, up $1.20 from the New York close. March Nymex crude oil futures were down 25 cents at $73.50 per barrel on Globex.

Write to Shri Navaratnam at shri.navaratnam@dowjones.com

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