Asian stocks were mostly higher on Monday, led by electronics and telecoms firms, while oil extended gains and the dollar edged up ahead of an expected U.S. Federal Reserve interest rate rise on Tuesday. But gains were capped by low trading volumes due to a holiday that closed Tokyo financial markets and by concerns about the strength of upcoming corporate earnings reports. "The market consensus seems to be that third-quarter results will not be good, and that could add further pressure to the market," said Kim Jung-hwan, stock analyst at LG Investment & Securities. Japan has another holiday on Thursday and few scheduled economic events, causing investors to look to global events for direction. Oil prices extended gains from Friday after Russian oil major YUKOS suspended most of its oil exports by rail to China on Sunday. That was the first sign of supply disruptions due to its financial difficulties. NYMEX light crude for October delivery was up 21 cents to $45.80 a barrel after surging nearly four percent on Friday on worries the U.S. hurricane season would continue to hamper energy production and imports in the Gulf of Mexico.
ASIA STOCKS
Hong Kong's Hang Seng Index <.HSI> rose 0.4 percent while the Hang Seng China Enterprise Index <.HSCE>, which groups Chinese stocks listed in Hong Kong, rose 1.9 percent on hopes that measures introduced by Beijing to prop up its domestic market may benefit Chinese firms listed in the city. China is considering a series of market reforms, such as attracting more foreign cash, to prop up the US$500 billion equity markets, an official financial newspaper in China reported. The State Council, or cabinet, also intends to lure long-term money -- such as pension funds and insurers' premiums -- into shares, the China Securities Journal said.
China Mobile <0941.HK> jumped one percent after saying its subscriber base grew faster than that for rival China Unicom Ltd. <0762.HK>. China Unicom's shares were up 0.8 percent. South Korea's benchmark index rose 1.5 percent. Technology shares were among the early gainers, with LG Electronics Inc. <066570.KS> up 1.3 percent ahead of the expected release of August sales figures later in the session. Shares in Samsung Corp. <000830.KS> gained 3.2 percent after affiliate Samsung SDI Co. <006400.KS> said it would buy 70 billion won ($61.10 million) worth of shares in the Samsung conglomerate's de facto holding company. But Hynix Semiconductor Inc. <000660.KS> shares fell 1.8 percent after South Korea's financial regulator said the chip maker violated accounting rules between 1999 and 2003. The MSCI index of Asian share markets outside Japan <.MSCIAPJ> was up 0.6 percent by 0230 GMT, while its technology component was up 0.9 percent. Australia's S&P ASX 200 <.AXJO> was flat, while Singapore's Straits Times Index <.STI> fell 0.2 percent and Taiwan's benchmark index <.TWII> rose 1.3 percent. When Tokyo markets reopen, Japan bank shares may attract some attention as investors consider who might benefit after regulators effectively forced Citigroup Inc. out of the lucrative private banking business in Japan after uncovering a series of problems, including a failure to prevent suspected money laundering.
FOMC MEETING
Investors were expecting the Federal Reserve to hike interest rates 25 basis points to 1.75 percent on Tuesday. Analysts said investors would be looking beyond the Fed's third rate rise of the year to signals on jobs, corporate investment and consumer spending that could show whether the U.S. economy is recovering. The dollar bought about 110.05 yen , up from 109.88 in New York trade on Friday. The euro stood at $1.2154 from $1.2177 in late New York. U.S. blue chips slipped last week for the first time in six weeks after warnings about upcoming quarterly results from some big names, including Coca-Cola Co. , Tribune Co. and Nortel Networks Corp. . The Dow Jones industrial average <.DJI> ended down 0.28 percent for the week. The technology-laden Nasdaq Composite Index <.IXIC> ended the week 0.83 percent higher. But jobs fears or data showing slow durable goods orders in August could hurt stocks, analysts said. On average, economists expect the data to show orders, excluding transportation and defense goods, rose 0.8 percent. Spot gold started the week about $1 down at 404.50/$405.25 an ounce versus $405.50 in late U.S. trade on Friday.////