SINGAPORE (MarketWatch) -- Asian share markets were higher Tuesday with cyclical stocks and coal miners rising on hopes for some stability in the global economy, but trade was quiet with markets shut in Japan and South Korea. Australia's S&P/ASX 200 was up 0.5% - after a 3.0% rise Monday to six-month highs - with New Zealand's NZX-50 up 2.1%, briefly hitting its best level since November 11. Investors were comforted by a strong night on Wall Street, with "quite a bit of literature from around the world these days about economies slowly picking up," said Peter Young, an adviser at Forsyth Barr. The Dow Jones Industrial Average jumped 2.6% while the S&P 500 turned positive for the year to date. Data from the U.S. and China in particular have been reassuring in recent days, though there are also signs of ongoing economic weakness and concerns about the health of the large U.S. banks. Some analysts have urged caution given the pace of the recent rise in global stock markets, and the large gains made in Asia Monday may have pre-empted Wall Street to some extent. "We have made a lot of money over the last eight weeks and continue to think the trick from here will be to keep that money," said analyst Jeffrey D. Saut at Raymond James Equity Research in the U.S. "Longer-term we are pretty optimistic. Near-term, we are cautious." Stocks tied to the economic cycle led the way in Sydney, with David Jones up 6.0%, Macquarie Group up 5.2%, Boral up 7.5% and Rio Tinto up 3.8%. Coal-sector stocks took their lead from a rise in U.S. coal shares Monday after Goldman Sachs raised its coverage view on the companies to attractive from neutral, saying there were several reasons to buy coal stocks now, including expectations for an economic recovery in China. Maccarthur Coal was up 4.2% with Centennial Coal rising 9.6%, while Whitehaven Coal added 2.5%. Singapore's Noble Group said it was increasing its cash offer for Gloucester Coal, calling on the board of Gloucester to act immediately to declare the offer superior to a proposed merger deal with Whitehaven Coal. There was news of more capital raisings in Australia with BlueScope Steel, the country's largest steel maker, saying it planned to raise up to A$1.41 billion through an entitlement offer to cut debt and strengthen its balance sheet. That stock was suspended from trade. Cyclical stocks were higher also in New Zealand, with chipmaker Rayon up 13.6% after announcing a NZ$9 million research project, to be half funded by a government grant. Fisher & Paykel Appliances was up 13.7%, Fletcher Building up 4.4%, Contact Energy up 2.7% and Telecom 2.6% higher. The euro was still stronger in currency markets as risk appetite improved, with the single currency at $1.3421, from $1.3405 late in New York, and at Y132.68, from Y132.60, off an early low of Y132.35. "I am bullish risk, so I am bullish the euro," said ANZ Bank senior dealer Alex Sinton. The U.S. dollar was at Y98.86, from Y98.93 in New York, while the Australian dollar was sticking near US$0.7400 before the Reserve Bank of Australia's interest rate decision, with the central bank expected to stand pat. Despite the recent market inclination to sell the U.S. dollar, Westpac said that, based on leading indicators, it was the most desirable currency among the Group of Three, followed by the euro and the yen. "The temptation is to ignore these signals and to be short the dollar by focusing exclusively on improving risk appetite," said analyst Richard Franulovich, "but sentiment is fickle." Spot gold was down 95 cents at $902.25 a troy ounce after a strong performance in New York. LME three-month copper gained 2.7% in electronic trade after Monday's London holiday, to $4,720 a metric ton. David Moore, an analyst at Commonwealth of Australia, said the market was taking a "glass is half full view" on the global economic outlook. Front-month Nymex crude oil futures were down 14 cents on Globex at $54.33 a barrel, having risen $1.27 in New York. [image: End of Story]
