Asian stocks eke out modest gains

Japanese shares led gains in the region, rising to a fresh 9-1/2 month peak, boosted by healthy corporate earnings, strong inflows from foreign investors and gains on Wall Street. The Nikkei ended up 0,3 percent, with the broader Topix index up 0,7 percent.
Stocks in most of Asia ex-Japan also edged higher with buying across the materials, consumers and the energy sectors, though benchmark indexes fell in Singapore and South Korea, where the government unveiled cash support for troubled saving banks.
The MSCI’s index of Asia Pacific shares outside Japan was up 0,2 percent, moving further away from a two-month low tested last Friday.
Japanese shares have gained some 6 percent this year, making it the best-performing Asian market so far in 2011, while Asian stocks outside Japan are down more than 2 percent as worries about growing inflationary pressures prompt foreign investors to rotate money out of emerging economies.
While Asian central banks have scrambled to tighten policy, some countries are still perceived to be falling behind in fighting inflation, making investors cautious about adding exposure to these markets even though recent steep drops have made valuations more attractive.
“Emerging market tightening is falling short of what needs to be done due to concerns that higher rates will lead to currency strength,” Brown Brothers Harriman strategists said in a note.
“As such, more and more EM countries are being viewed as behind the curve and so the current period of EM underperformance could continue until more signs are seen they are getting back ahead of the curve.” – Reuters.