Asia's Stocks Rise, Led by Rally in Japan

In Hong Kong, the Hang Seng adds 155 points, or 0.6%, to 24,284.04, while in China the Shanghai Composite gains 11 points, or 0.3%, to 3375.41.
By Daniel M. Harrison ,

A slightly weakening yen, coupled with limited downside in

China Mobile

(CHL) - Get Report

, helped provide support to prices in Asia Tuesday, though trading volumes remained sluggish.

Japan's Nikkei gained the most of the major indices, rising 203 points, or 1.5%, to 13,893.31, after a rebound in financials. In Hong Kong, the Hang Seng added 155 points, or 0.6%, to 24,284.04, while in neighboring China the Shanghai Composite Index rose 11 points, or 0.3%, to 3375.41.

Telco goliath China Mobile,

which plunged more than 8% Monday

following the long-awaited announcement of domestic Chinese industry restructuring plans, slipped into the red by the end of the afternoon. China Mobile lost 0.2% to HK$114.70, after opening up at HK$116.60. Many market participants remain skeptical about the impact of changes to the sector, however.

"There was nothing new in the announcement made on May 23

to restructure the telco industry that the market did not already know," says Marvin Lo, telecom analyst for Daiwa Bank in Hong Kong. "China Mobile's dominant position is likely to remain intact in the post-restructuring era, and it continues to be our top pick of the sector."

Market turnover in Hong Kong amounted to HK$54.49 billion, or $7 billion.

Among the day's light news flow came the announcement that Walter Kwok has been ousted by his family as chairman and chief executive of real estate giant

Sun Hung Kai Properties

(SUHJY)

. Kwok's mother Kwong Siu-hing, who is 79 years old, will take his place at the helm of the Hong Kong developer. Shareholders applauded the management change, and the stock rose 0.9% to HK$126.80.

E-commerce giant

Alibaba.com

( ALBCF) regained ground after Monday's dip, when the stock fell to a one-month low intraday. Alibaba rose 0.8% to HK$14.42.

Commodities remained strong in Asian trading, propelled by high fuel costs. In Singapore, oil rose 0.8% to $133.20 a barrel, while gold settled back at $926.95 an ounce during the afternoon, after reaching $931.05 earlier in the day.

Hong Kong-listed Chinese gold miners mostly continued their surge upward.

Lingbao Gold

(LGBOF)

gained 1.9% to HK$3.82, and

Zijin Mining

(ZIJMF)

rose 1.2% to HK$7.79.

Despite the recent rally in commodity prices, some analysts in Asia say they may have run their course in terms of price gains.

"An upward shift in yield curves would hit the commodity markets hardest given the lack of income support of this asset class," says Sean Darby, chief Asia strategist at Nomura Bank in Hong Kong. "We are closing our commodity inflation protection basket, since it is at risk of becoming a victim of its own success as monetary policy is tightened."

In Japan, the dollar was bought aggressively vs. the Japanese currency in the aftermath of the market close. The yen was recently at 104.26, down from 103.39 in the Asian market. Notes published by currency strategists Tuesday indicated that the dollar may be set for a big rally in U.S. trading.

Japanese financials leaped on bargain buying, after heavy selling the previous week.

Mizuho Financial

(MFG) - Get Report

led the pack, up 4.1%, at 21,000 yen. Among exporters,

Canon

(CAJ) - Get Report

added 1.9% to 5370 yen, and

Nintendo

(NTDOY)

continued its climb on the back of anticipation over the Wii Fit. Nintendo gained 0.5% to 59,200 yen.

Other Asian markets were mostly stronger. South Korea's Kospi rose 1.4% to 1825.23, and Taiwan's Taiex advanced 0.8% to 8778.39. In India, the Bombay Sensitive Index fell at the close, losing 0.5% to 16,275.59.

Be sure to check out the Far East Portfolio at Stockpickr.com to find out which Indian and Chinese companies are making big moves and announcing major news.

Daniel M. Harrison is a business journalist specialising in European and emerging markets, in particular Asia. He has an MBA from BI, Norway and a blog at

www.theglobalperspective.biz

. He lives in New York.

Loading ...