Asian markets mostly up after Wall St, Europe gains

Asian markets mostly climbed on Wednesday, with dealers taking a positive cue from Wall Street and Europe, following a surge in investor confidence in eurozone powerhouse Germany.

Japanese shares posted healthy gains as the yen softened and data showed exports rose for the first time in eight months in January, although the country still posted its worst ever monthly trade deficit.

Tokyo added 1.00 per cent, Sydney was 0.28 per cent higher, Seoul jumped 1.22 per cent, Hong Kong climbed 0.40 per cent and Shanghai was off 0.40 per cent.

On Wall Street investors returned from a three-day weekend to send the Dow and S&P 500 to more than five-year highs thanks to fresh merger and acquisition news.

The Dow rose 0.39 per cent to its best level since October 12, 2007 and the S&P 500 was up 0.73 per cent, hitting its highest point since October 31, 2007. The Nasdaq gained 0.68 per cent.

Reports that office supply retailers Office Depot and OfficeMax were planning a tie-up followed last week’s news of a merger between American Airlines and US Airways, and the Berkshire Hathaway-3G Capital takeover of Heinz.

Hopes for an end to Europe’s long struggles were given a fillip by the widely watched ZEW economic institute investor confidence index in Germany, which soared to 48.2 points in February from 31.5 points in January, its highest level since April 2010.

The reading beat market expectations for a much more modest increase to just 35 points this month.

On currency markets the yen remained under pressure as dealers expect further measures from the new hawkish government in Tokyo to kickstart Asia’s number two economy.

The dollar was at 93.60 yen in early trade against 93.54 yen in New York on Tuesday.

The single European currency bought 125.40 yen and US$1.3413 compared with 125.24 yen and US$1.3390 in US trade.

Official data on Wednesday showed Japan logged its worst ever trade deficit in January, with a shortfall of 1.63 trillion yen, more than the 1.3 trillion forecast. That came despite exports seeing first gain since June.

In Sydney, mining giant BHP Billiton said its first half net profit fell 58 per cent, but also announced that its chief executive Marius Kloppers will retire in May, to be replaced by the man who has headed the firm’s non-ferrous division since 2008. The firm’s shares were 0.56 per cent lower in early trade.

On oil markets New York’s main contract, light sweet crude for delivery in March gained 48 cents to US$97.14 a barrel and Brent North Sea crude for delivery in April dropped 13 cents to US$117.39.

Gold was at US$1,607.76 at 0230 GMT, compared with US$1,612.50 late Tuesday.