Asia markets struggle as profit-taking offsets Wall St rally

[HONG KONG] Asian equities were mostly down on Tuesday after healthy gains in the previous session attracted profit-takers, offsetting a strong lead from Wall Street.

Shanghai lost 1.00 per cent after rallying Monday in response to the Chinese central bank's weekend interest rate cut, while Hong Kong pared an initial advance to sit virtually unchanged.

Tokyo closed flat, slipping 0.06 per cent, or 11.72 points, to 18,815.16.

Sydney - which ended Monday at a seven-year high - fell 0.42 per cent, or 24.98 points, to 5,933.90 after the Australia central bank kept interest rates on hold, confounding expectations for a cut to another record low.

However, Seoul finished 0.23 per cent, or 4.57 points, higher at 2,001.38.

US shares added to their six-year bull run Monday, with the Dow and S&P 500 again ending at record highs, while the Nasdaq surged above 5,000 for the first time since 2000, when the dot-com bubble burst.

The tech-rich Nasdaq jumped 0.90 per cent, the Dow rose 0.86 per cent and the S&P advanced 0.61 per cent.

The gains came on a stream of merger announcements, including the US$16.7 billion acquisition of Freescale Semiconductor by NXP Semiconductor, in a deal that links two Nasdaq companies.

But Asian markets were unable to add to Monday's gains, while regional investors are keeping an eye on Australia, where central bank policymakers are forecast to announce another rate cut to record lows to support the struggling economy.

On currency markets the dollar fetched 119.71 yen, down from 120.17 yen in New York, while the euro rose to US$1.1197 from US$1.1182.

The greenback was also at 6.2748 yuan, against 6.2850 in US trade, levels not seen since October 2012, and well up from 6.2668 on Friday before the rate cut.

In Sydney investors reversed early gains after the Reserve bank of Australia held rates at record lows.

"The market was expecting another cut and because that didn't come through, and given that the RBA didn't deliver, you're getting a selloff," Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors, told Bloomberg News.

"The market has run really hard, so needs a period of consolidation and this is providing the trigger." The Australian dollar, which has suffered heavy selling against its US counterpart in recent months, climbed to 78.28 US cents from 77.69 US cents.

Traders are keeping an eye on the start Thursday of the annual meeting of China's rubber-stamp legislature, the National People's Congress, at which Premier Li Keqiang is expected to deliver an address on the state of the economy.

Oil prices recovered slightly after sliding in the previous session. US benchmark West Texas Intermediate rose 39 US cents to US$49.98 while Brent crude gained 88 US cents to US$60.42 in morning trade.

Gold fetched US$1,210.40 against US$1,216.55 late Monday.

In other markets: - Wellington was flat, edging up edged up 0.99 points to 5,893.67.

Contact Energy rose 0.33 per cent to NZ$6.11 and market heavyweight Fletcher Building was unchanged at NZ$8.63.

AFP