Coal Stocks Push up Australia

SINGAPORE -- Asian share markets were higher Tuesday on hopes for some stability in the global economy, and as coal stocks rose, although trade was quiet with markets shut in Japan and South Korea for holidays.

Australia's S&P/ASX 200 was up 0.5% -- after a 3% rise Monday to six-month highs -- with New Zealand's NZX-50 up 2.1%, briefly hitting its best levelsince Nov. 11.

The Dow Jones Industrial Average jumped 2.6% while the S&P 500 turned positive for the year to date.

There's "quite a bit of literature from around the world these days about economies slowly picking up," said PeterYoung, an adviser at Forsyth Barr.

Data from the U.S. and China have been reassuring in recent days, althoughthere are also signs of ongoing economic weakness and concerns about the health of the large U.S. banks."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 up6%, 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 was 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 toact immediately to declare the offer superior to a proposed merger deal with Whitehaven Coal.In Australia, BlueScope Steel, the country's largest steel maker, said it planned to raise up to 1.41 billion Australian dollars ($1.11 billion) through an entitlement offer to cut debt and streng then its balance sheet.

That stock was suspended from trade.Cyclical stocks were higher also in New Zealand, with chip maker Rayon up13.6% after announcing a 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¥132.68, from ¥132.60, off an early low of ¥132.35.

"I am bullish risk, so Iam bullish the euro," said ANZ Bank senior dealer Alex Sinton.The U.S. dollar was at ¥98.86, from ¥98.93 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.

Three-month copper on the London Metal Exchange 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.

By - Rosalind Mathieson