Asian shares higher on bargain hunting

Asian shares higher on bargain hunting

Hong Kong: Asian stocks rose on Wednesday on bargain hunting, with Hong Kong and Shanghai boosted by upbeat Chinese growth data, but concerns over the eurozone debt crisis continued to dampen sentiment.

The euro steadied but remained under pressure after Ireland’s credit rating was downgraded to junk status, while a stronger yen kept Japanese investors nervous.

Hong Kong rose 1% and Shanghai gained 1.20%. Sydney added 0.50% and Seoul climbed 0.89%. Tokyo was flat.

China’s National Bureau of Statistics said the economy grew 9.5% in the April-June quarter, slower than the 9.7% recorded in the previous three months but quicker than the 9.4% forecast by analysts.

The NBS also said growth hit 2.2% quarter on quarter, faster than the 2.1% rise between January-March and the previous three months.

Wednesday’s figures come after a string of monetary tightening measures by Beijing -- including five interest rate hikes since October -- aimed at cooling inflation, which hit a three-year high of 6.4% in June, well above the government’s full-year target of four%.

“Encouraging economic data out of China today gave a much needed psychological lift," Tim Waterer, senior currency dealer at CMC Markets, told Dow Jones Newswires.

The data also provided some support for Sydney and Seoul stocks, where a number of firms have trade links with China.

Wednesday’s region-wide gains follow a heavy sell-off in the previous two days caused by the ongoing troubles in the eurozone.

But eyes are still on Europe, where surging yields on Italian and Spanish government bonds have sparked fears that the crisis was spreading from Greece to the eurozone’s third- and fourth-largest economies, respectively.

Adding to the troubles was news that Moody’s had reduced Ireland’s government debt ratings by one notch, to Ba1 from Baa3 - junk status - saying there was a “growing possibility" the country would need more bailout aid.

The euro was sitting at $1.3995 against the dollar in Tokyo trade, from $1.3975 late in New York Tuesday and at 111.20 yen from 110.75. However, the unit is still down four US cents and four yen since Friday.

The dollar was at 79.45 yen, from 79.25 but the Japanese unit remains near its highest level since reaching a record 76.25 against the greenback after the 11 March earthquake, which prompted a Group of Seven forex intervention.

Markets are also keenly awaiting the outcome of stress tests on the eurozone banking sector.

Oil was down in Asian trade on fears of faltering energy demand after US crude reserves increased and concerns over the eurozone debt crisis.

New York’s main contract, West Texas Intermediate for delivery in August, fell 41 cents to $97.02 a barrel in morning trade.

Brent North Sea crude for August delivery shed 43 cents to $117.32.

Gold, a safe haven in times of economic uncertainty, opened at $1,568.00-$1,569.00 an ounce in Hong Kong, up from Tuesday’s close of $1,546.00-$1,547.00.