Asian stock markets advance but caution lingers

HONG KONG: Asian stock markets rose moderately Wednesday, led by oil companies on stronger crude prices, but investors remained cautious as an enormous spring rally showed signs of fatigue.

Shanghai and Hong Kong shares gained on news that China's aggressive stimulus spending was starting to filter through the economy in the form of higher consumer spending. The dollar was higher against the yen.

Investors, encouraged by hints of an economic turnaround, have rushed into global stock markets over the last nine weeks, pushing major benchmarks 30 percent and higher.

While some analysts see more upside in the short-term as investors look to spend their cash and worry about missing the rally, confidence remains fragile with economic conditions and company earnings outlooks still lackluster.

"The market has already gone too far too fast, so we're expecting some profit taking," said Alex Tang, head of research at Core Pacific-Yamaichi International in Hong Kong, "Shares are starting to be overbought."

Japan's Nikkei 225 stock average rose 60.41 points, or 0.7 percent, to 9,359.02, while South Korea's Kospi added 0.4 percent to 1,408.68.

In China, Hong Kong's Hang Seng rose 0.7 percent to 17,264.90 and Shanghai's benchmark gained 1.2 percent to 2,649.35.

Investors there were comforted by news China's retail sales jumped 14.8 percent in April from a year earlier as stimulus spending helped support domestic demand. Dampening sentiment, though, were other data showing industrial output rising only 7.3 percent, lower than expected.

Elsewhere, Taiwan shares gained 0.8 percent. Australian and Indian indexes fell.

Lifting the broader market were shares in oil companies like Chinese offshore producer CNOOC and Japan's Inpex Corp.

Crude prices gained more ground as an unexpected fall in U.S. crude inventories suggested demand may be picking up. Benchmark crude for June delivery was up 72 cents to $59.57 in Asia.

Overnight in New York, Wall Street ended largely mixed. The Dow rose 50.34, or 0.6 percent, to 8,469.11. The S&P 500 index slipped 0.89, or 0.1 percent, to 908.35.

Wall Street futures augured a mixed opening in the U.S. Dow futures were down 10 points, or 0.1 percent, at 8,426 while S&P 500 futures gained 2.1, or 0.2 percent, to 908.90.

In currencies, the dollar climbed to 96.57 yen from 96.14 yen. The euro was little changed against the dollar.