Asian markets mixed as earnings rally weakens (AP) (21-07-2009)

HONG KONG (AP) -- Asian stock markets turned mixed Tuesday, weakening amid caution after a recent run driven by stronger-than-expected earnings from global companies.

Tokyo's market outperformed the region to hit a two-week high after being closed for a holiday Monday, as investors seemed to shrug off the unfolding shake-up in Japanese national politics. Oil prices recovered to trade mostly flat at $64 a barrel while the dollar was lower against the yen.

The mixed trade came after Wall Street extended its winning streak overnight, helped by better economic data, a deal to rescue troubled lender CIT Group and second-quarter earnings from companies like toy maker Hasbro that topped forecasts.

Global equities had resumed their upward momentum in recent days as investor seemed relieved that corporate results and outlooks have been better than expected so far, suggesting global demand and production are coming back after a slump earlier this year.

Alex Tang, Hong Kong-based head of research at Core Pacific-Yamaichi International, said the signs still point to recovery, but investors may be taking some profits from the recent advance.

Tokyo's benchmark Nikkei 225 stock average rose 256.70 points, or 2.7 percent, to 9,652.02 as Japan's Cabinet agreed to dissolve the powerful lower house of parliament, setting the stage for national elections that could topple the country's ruling party.

South Korea's Kospi rose 0.7 percent to 1,488.99. Benchmarks in Australia and Taiwan also climbed modestly.

A number of Asian markets were unable to hold their gains.

Hong Kong's Hang Seng closed unchanged in whipsaw trade, closing off 0.64 points at 19501.73. China's Shanghai market dropped 1.6 percent and India's Sensex shed 0.3 percent. Singapore was marginally lower.

In the U.S. Monday, some positive economic data added to a sense of optimism in the market supported by company earnings. Conference Board's index of leading economic indicators, a gauge of future economic activity, rose more than expected in June.

The Dow rose 104.21, or 1.2 percent, to 8,848.15 for its sixth straight advance, the lengthiest string of gains since a seven-day rise in April 2007. It was the benchmark's best close since Jan. 6.

The S&P 500 index rose 10.75, or 1.1 percent, to 951.13, its best finish since Nov. 5.

U.S. stock futures pointed to modest losses Tuesday on Wall Street. Dow futures were down 13, or 0.2 percent, at 8,792 and S&P futures fell 0.8, or 0.1 percent, to 948.20.

Source: AP