Asian markets higher after Wall St records

HONG KONG - Asian markets extended gains on Tuesday following another record-breaking close on Wall Street, with Japan's Nikkei tapping a six-year closing high as the dollar renewed its upward trend against the yen.

Chinese shares enjoyed a second day of buying, although there are still lingering fears about a liquidity crisis despite a cash injection from the country's central bank.

Tokyo added 0.12 per cent, or 18.91 points, to 15,889.33, its highest finish since December 2007.

Hong Kong rose 1.13 per cent, or 257.99 points to 23,179.55, Sydney closed 0.67 per cent, or 35.3 points, higher at 5,327.2 and Seoul was 0.24 per cent higher, adding 4.70 points to 2,001.59.

Shanghai ended 0.15 per cent higher, advancing 3.20 points to 2,092.91. Manila was closed for a public holiday.

On Wall Street the Dow and S&P 500 closed Monday at all-time highs yet again after fresh Commerce Department data pointed to a 0.5 per cent increase in consumer spending in November, the second month in a row to see a rise.

An estimate of consumer confidence by the University of Michigan also showed an improvement in December.

The news added to a run of recent figures showing a pick-up in the US economy - including data on unemployment and economic growth - indicating it is well on the road to recovery.

And last week the Federal Reserve gave it a vote of confidence as it said it would from next month reduce its stimulus programme by $10 billion to $75 billion a month.

The Dow rose 0.45 per cent to 16,294.61, while the S&P 500 advanced 0.53 per cent to 1,827.99. The Nasdaq added 1.08 per cent to end at 4,148.90.

The dollar continued to benefit from the positive news out of Washington. In afternoon Asian trade it was at 104.26 yen compared with 104.11 yen in New York. The greenback is approaching the five-year high of 104.63 yen touched last week.

The euro bought $1.3682 and 142.61 yen against $1.3695 and 142.58 yen.

Traders are keeping an eye on China, where authorities last week said they had pumped almost $50 billion into financial markets to avert a cash crunch, which had sent interbank borrowing rates to six-month highs and left banks unable to borrow.

The turmoil came as banks and other investors scrambled for cash as they approach the end of the year, when they typically have to meet regulatory requirements and funding demands from companies.

"The negative sentiment toward China's cash crunch has been eased after the central bank's latest move," Steven Leung, head of institutional sales at UOB Kay Hian, told Dow Jones Newswires.

However, while equities are slightly higher, analysts warn the problem may not have gone away just yet and will be looking to see whether the People's Bank of China continues to feed the system.

On oil markets New York's main contract, West Texas Intermediate for February delivery, was down 25 cents at $98.66 in early Asian trading. Brent North Sea crude for February fell one cent to $111.56.

Gold fetched $1,197.50 at 1048 GMT compared with $1,195.04 late Monday.

In other markets:

- Taipei was flat, edging down 5.97 points to 8,450.49.

Taiwan Semiconductor Manufacturing Co. fell 0.96 per cent to Tw$103.0 while smartphone maker HTC rose 4.06 per cent to Tw$141.0.

- Wellington rose 0.96 per cent, or 45.30 points, to 4,76794.

Contact Energy was up 0.80 per cent at NZ$5.06, Warehouse Group rose 2.74 per cent to NZ$3.75 and Air New Zealand was steady at NZ$1.62.

- Kuala Lumpur gained 0.14 per cent, or 2.63 points, to 1,835.49.

UEM Sunrise rose 1.8 per cent to 2.30 ringgit, while Felda Global Ventures Holdings shed 1.8 per cent to 4.37 ringgit.

- Jakarta ended up 0.32 per cent, or 13.23 points, at 4,202.83.

State miner Aneka Tambang rose 5.88 per cent to 1,080 rupiah, while retailer Hero Supermarket fell 1.92 per cent to 2,550 rupiah.

- Singapore closed up 0.36 per cent, or 11.07 points, at 3,127.29.

Singapore Telecom rose 0.56 per cent to S$3.60 while vehicle distributor Jardine Cycle and Carriage edged up 0.14 per cent to S$35.36.

- Bangkok ended flat, edging up 0.99 points to 1,327.13.

Coal producer Banpu lost 3.15 per cent to 30.75 baht, while oil company PTT rose 0.70 per cent to 288.00 baht.

- Mumbai fell 0.32 per cent, or 68.32 points, to 21,032.71.

Private Tata Power lost 3.20 per cent to 86.20 rupees while India's third largest IT outsourcer Wipro slipped 2.10 per cent to 540.30 rupees.