Asian shares higher on US stimulus hopes

Asian markets rose on Tuesday as unexpectedly weak housing data from the United States increased the likelihood the Federal Reserve would keep its stimulus programme in place for some time. Hong Kong and Shanghai led the gains after China's premier hinted that the government had a lower limit below which it would not let economic growth fall. Tokyo rose 0.82 percent, or 120.47 points, to 14,778.51, Seoul added 1.27 percent, or 23.80 points, to close at 1,904.15 and Sydney advanced 0.30 percent, or 15.2 points, to 5,017.1. Shanghai ended 1.95 percent higher, adding 39.11 points to 2,043.88 after Premier Li Keqiang was quoted in state media as saying economic growth must not slip below the "bottom line" of seven percent. Hong Kong rose 2.33 percent, or 498.92 points, to 21,915.42. With few catalysts to drive action, hopes that the Fed would delay winding down its bond-buying were taken as a positive, despite a soft lead from Wall Street. The National Association of Realtors said home sales fell 1.2 percent to an annual rate of 5.08 million in June, from a downwardly revised 5.15 million in May. The average analyst estimate was for a rise to a 5.28 million pace in June. Global markets steadied last week after Fed boss Ben Bernanke said the easy money policy would be kept in place for as long as needed until the economy was up to speed. Markets had been in turmoil for weeks prior to that as dealers bet on an end to the scheme in the near future. "Investors appear to be adjusting for a view that markets have overshot on the timing and impact of Fed monetary tightening," CMC Markets chief market analyst Ric Spooner told Dow Jones Newswires. "Economic growth will need to pick up from current levels for markets to bring forward current expectations of any actual increase in US interest rates from late 2014 at the earliest." While a positive for equities traders, gains in Wall Street's three main indices were capped by disappointing corporate results, including from market giant McDonald's. The Dow was flat, the S&P 500 rose 0.20 percent and the Nasdaq added 0.36 percent. However, expectations that US stimulus would remain in place sent the dollar down to 99.59 yen in New York from 100 yen in Tokyo earlier in the day. In afternoon trade on Tuesday the greenback bought 99.47 yen, while the euro fetched 131.19 yen and $1.3186, compared with 131.33 yen and $1.3186 in New York on Monday. China's Li was quoted in the Beijing News as saying: "The bottom line for economic growth is seven percent, and this bottom line must not be crossed." The target was necessary to ensure China's goal of doubling gross domestic product between 2010 and 2020, he said. The comments buoyed Chinese traders as it indicated Beijing would introduce some form of economy-boosting measures should growth fall too much, as it tries to avoid a so-called hard landing. Mainland markets have suffered this year as months of data have pointed to a slowdown in the world's number two economy and key driver of global growth. Eyes will now be on the release on Wednesday of an index of manufacturing activity that will provide a better idea about the state of the economy. On oil markets New York's main contract, West Texas Intermediate (WTI) for delivery in September, fell 84 cents to $106.10 a barrel. Brent North Sea crude for September fell 33 cents to $107.82. Gold cost $1,332.58 per ounce at 0800 GMT, compared with $1,317.21 late Monday. In other markets: -- Taipei climbed 1.35 percent, or 109.20 points, to 8,214.65. Taiwan Semiconductor Manufacturing Co was 3.09 percent higher at Tw$100.0 while leading chip design house MediaTek gained 3.93 percent to Tw$343.5. -- Manila jumped 1.75 percent, or 115.85 points, to 6,743.21. Philippine Long Distance Telephone Co. rose 2.79 percent to 3,100 pesos while Ayala Land gained 1.15 percent to 30.90 pesos. -- Wellington rose 0.58 percent, or 26.55 points, to 4,580.59. Telecom was up 0.86 percent to NZ$2.33 while Fletcher Building gained 0.35 percent to NZ$8.53.