UPDATE: Asian Shares End Higher; Five Indexes Hit 2009 Highs

By Matthew Allen and V. Phani Kumar

Indexes in Hong Kong, Australia, South Korea, India and Taiwan ended at their highest levels of 2009 Wednesday, reflecting buoyant investor sentiment in the region and tracking a similar upbeat performance on Wall Street.

Commodity-linked stocks led the charge on gold and oil price rises, with exporters and airlines also climbing.

Japan's Nikkei 225 Average rose 0.5% to 10270.77, Hong Kong's Hang Seng Index jumped 2.6% to 21402.92, Australia's S&P/ASX 200 advanced 2.4%, South Korea's Kospi climbed 1.8%, India's Sensex rose 1.35%, Taiwan's Taiex expanded 1.3% and New Zealand's NZX 50 added 0.6%. Singapore's Straits Times Index advanced 1.4%.

The gains in Asia came after data in the U.S. Tuesday showed a larger-than-expected increase in retail sales in August, and Federal Reserve Chairman Ben Bernanke said from a technical point of view, the U.S. recession was "very likely over."

"Ben Bernanke's comments overnight that the U.S. is basically out of recession has boosted confidence significantly. This has really helped convince investors that the recovery is real. Skeptical cash from the sidelines seems to be buying today," said Ben Potter, research analyst at IG Markets.

But some analysts remained cautious. The U.S. share market rise "was surprisingly light, likely a function of investors unwilling to be overly-long on lingering fears of a global equity correction that drags all risk assets weaker," said analysts at RBC Capital Markets Emerging Markets Research Group.

Shares in Shanghai went against the general trend to end 1.1% lower at 2999.71, with steelmakers declining on overcapacity concerns.

"There are still uncertainties on the government's monetary measures later this year, which may continue to dampen investor interest in large-cap stocks such as banks and real estate shares," said Shenyin & Wanguo Securities analyst Li Xiaoxuan.

Baoshan Iron & Steel and Wuhan Iron & Steel dropped 3.1% each. Among financials, Shanghai Pudong Development bank was down 3% and China Construction Bank gave up 2.2%.

Oil plays got a boost after oil futures rose on Tuesday in New York. Japan's Inpex was up 2.4%, Cnooc added 2.4% in Hong Kong and Woodside Petroleum jumped 4.8% in Sydney. The front-month October contract on the New York Mercantile Exchange was recently trading 12 cents lower at $70.81 a barrel.

Resource stocks were broadly higher after materials and industrial stocks gained in the U.S. on hopes of a recovery in demand for raw materials due to the improving economy. Rio Tinto and BHP Billiton each climbed 2%, with Sumitomo Metal Mining gaining 1.2% in Tokyo and Aluminum Corp. of China rising 3.4% in Hong Kong.

In Mumbai, metals, autos and banks led the index higher. Shares of ICICI Bank added 3% and Reliance Industries gained 1.6%. Shares of Tata Motors soared 6.2%, after the Economic Times reported the auto major planned to sell a minority stake in its Tata Motors Finance unit to lower debt.

Shares of Japanese light emitting diode-related firms were higher following a Nikkei report that rising demand for LEDs was helping the companies weather a tough overall business climate. Toyoda Gosei and Disco, both mentioned in the report, were up 6.6% and 4%, respectively.

In Hong Kong, Citic Pacific jumped 5.3% on a report in the state-run Shanghai Securities News the company has hired Citic Securities as the underwriter of its planned Class A share initial public offering ahead of a listing in Shanghai, raising hopes a listing there would help its Hong Kong valuations as well.

Exporters were broadly higher after the overnight show on Wall Street, with Samsung Electronics rising 3.4% in Seoul and Hon Hai Precision Industries rising 1.6% in Taipei, while in Tokyo, Canon climbed 4.2% as Nissan Motor added 2.6%.

In foreign exchange trade, the euro was buying $1.467 and 132.56 yen from 133.60 yen. The U.S. dollar was at 90.36 yen, from 91.06 yen.

Calyon, in a note, revised up its year-end target for the euro, to $1.50 from $1.42. It said dollar weakness remained the short-term underlying theme for foreign exchange markets as the dollar superseded the yen as the funding currency of choice amid the continuing "grind higher in global optimism."

Spot gold extended its lead above the $1,000 per troy ounce milestone, and was recently at $1,016.55. Link...