Tokyo’s Nikkei leads Asian equity rally

Tokyo’s Nikkei 225 Average led Asian markets higher as sentiment towards export stocks was lifted by the yen weakening to a seven-month low.

The Nikkei on Wednesday climbed to a six-month high, up 1 per cent to 9,554, led by electrical equipment makers and car manufacturers.

Among the top gainers, Oki Electric climbed 7 per cent to Y92, while Advantest, the maker of chip testing gear, rose 4.8 per cent to Y1,101.

Mazda Motor, which lost nearly 10 per cent in the previous session on talk of a capital raising, clawed some ground back after it confirmed it was looking to raise up to Y147bn ($1.8bn) by issuing new shares. The new issue would dilute existing shares by up to 62 per cent.

But Mazda shares were up in line with other carmakers, thanks to the weaker yen. Mazda gained 1.4 per cent to Y147, Isuzu Motors climbed 3 per cent to Y443, while Fuji Heavy Industries, the maker of Subaru cars, rose 3.6 per cent to Y602.

Overall, the FTSE Asia Pacific index crept 0.1 per cent higher to 247.4, held back by a 1.5 per cent fall on India’s BSE Sensex index to 18,145.25.

Indian banks led the decline on the Sensex as investors turned cautious following Tuesday’s run up to a seven-month high. State Bank of India shed 8.1 per cent to Rs2,255, while ICICI Bank lost 3.4 per cent to Rs957.70.

Investors were also focusing on HSBC’s February preliminary manufacturing Purchasing managers' index for China for clues about the country’s future monetary policy.

China’s manufacturing sector contracted in February for the fourth consecutive month as export orders dropped amid Europe’s debt crisis, the HSBC index showed, indicating that Beijing may continue its monetary easing to support the economy.

China’s Shanghai Composite index rose 0.9 per cent to 2,403.6 as property shares rose to their highest levels in three months after the Shanghai Securities News said non-local residents qualified to buy second homes.

China Vanke, the nation’s biggest listed property developer, rose 3.4 per cent to Rmb8.19 while second-ranked Poly Real Estate gained 2.7 per cent to Rmb11.28.

Hong Kong’s Hang Seng index climbed a more modest 0.3 per cent to 21,549.28.

In Seoul, car parts makers rallied after South Korea’s foreign ministry said the country’s free trade agreement with the US will take effect on March 15, which will immediately remove tariffs on car parts. Mando climbed 1.9 per cent to Won165,500 and Hyundai Mobis rose 1.6 per cent to Won281,500.

The Kospi Composite index rose 0.2 per cent to 2,028.65.