Asian stocks reversed early losses to end mostly higher on Tuesday as Chinese shares continued to rally and a rebound in iron ore prices lifted resource stocks. With the dollar hitting a fresh one-month high against a basket of major currencies, investors eagerly awaited a slew of U.S. data on durable goods orders, new home sales and consumer confidence later in the day for further clues to the Fed policy outlook.
Chinese shares rallied sharply to hit another seven-year high, with technology stocks pacing the gainers after shanghai announced an ambitious plan to build the city into a globally competitive technological innovation center. Defense-related stocks also gained ground after China unveiled a new defense strategy to boost its naval capability and counter complicated threats and challenges in the oceans.
Also, the Chinese government on Monday said that it would slash import tariffs on consumer goods such as cosmetics, shoes, clothes and diapers in June, in a bid to boost domestic consumption amid slowing economic growth. Import taxes on some products will be lowered by an average over 50 percent, starting June 1. The benchmark Shanghai Composite index soared 97.1 points or 2.02 percent to close at 4,910.90.
Hong Kong's Hang Seng index rose 257.03 points or 0.92 percent to close at 28,249.86 on expectations of more money inflows from the mainland after policymakers said they would allow fund managers to sell Hong Kong-registered funds directly to Chinese investors.
Japanese shares rose for the eighth consecutive session, but gains were capped due to profit taking at higher levels. The benchmark Nikkei average swung between gains and losses before closing up 23.71 points or 0.12 percent at 20,437.48, a fresh 15-year closing high. The broader Topix index closed marginally higher at 1,659.57.
Japan Airlines rallied 3.8 percent and ANA Holdings added a percent. Honda Motor, Fanuc and Sharp Corp rose between 0.1 percent and 0.6 percent, underpinned by a weaker yen. Toshiba edged up 0.2 percent on a Nikkei report that the industrial conglomerate will not pay a year-end dividend for the 12 months through March 31, 2015.
Mitsubishi Heavy Industries fell half a percent on reports that it plans to buy a stake in Japan Tunnel Systems, a joint venture firm set up by IHI and JFE Engineering. Suntory Beverage & Food fell 1.7 percent after the company said it would buy vending-machine operations from Japan Tobacco for about 150 billion yen. Japan Tobacco slipped 0.1 percent on profit taking after rising 1.1 percent the day before.
Tosoh Corp dropped 1.3 percent after signing a pact with Chemtura Corp for establishing the framework for a long-term relationship for brominated flame retardant products and technologies in Japan. In economic news, Japan's corporate services price index rose 0.7 percent in April from a year earlier, central bank data showed, exceeding forecasts for an increase of 0.6 percent.
Australian shares hit a three-year high, led by gains in miners after iron ore prices rose two percent overnight, adding to Friday's strong gains. The benchmark S&P/ASX 200 index gained 51.90 points or 0.91 percent to close at 5,773.40, rising for the fourth straight day. Mining giant BHP Billiton and rival Rio Tinto both rose over 1 percent. Fortescue Metals Group soared 10.6 percent on reports that two major Chinese companies were looking to take a stake in Andrew Forrest's struggling iron ore producer.
Gold miner Newcrest Mining advanced 1.4 percent as spot gold prices held steady near $1,205.10 an ounce in Asian trading. Gas and electric utility AGL Energy climbed 6.4 percent after the company said it aims to sell assets worth more than A$1 billion and cut costs by A$200 million within two years.
Energy stocks Woodside Petroleum, Oil Search and Santos rose between 0.3 percent and 1 percent, while the big four banks closed up between 0.8 percent and 2.1 percent. Westpac said it is hiring Commonwealth Bank executive Lyn Cobley to replace the head of its institutional arm, Rob Whitfield, who is leaving the lender after nearly 30 years.
Shares of Aristocrat Leisure rallied 6.5 percent. The poker machine supplier reported 35 percent profit growth in the first half of the 2015, partly reflecting strong growth at its Australian and U.S. operations. Hearing implants maker Cochlear gained 1.4 percent after appointing Chris Smith as its new CEO.
Seoul shares drifted lower amid indications the Federal Reserve is poised to begin hiking rates in September. The benchmark Kospi average slid 2.6 points or 0.12 percent to finish at 2,143.50 as trading resumed after Monday's public holiday. Cheil Industries Inc. and Samsung C&T Corp both leaped by the daily limit of 15 percent after the affiliates of Samsung Group said they have planned to merge by the end of August.
The South Korean won fell more than 1 percent against the dollar as the safe-haven Japanese yen tumbled to a seven-year low, boosted by Friday's comments from Federal Reserve Chair Janet Yellen and renewed concerns about Greece's debt problems.
New Zealand shares inched up marginally, with Tower pacing the gainers after the general insurer reported strong underlying earnings, hiked its interim dividend and confirmed an on-market share buyback. Shares of Tower climbed 4.3 percent to $2.20 and milk marketing firm A2 Milk gained 2 percent to close at 52 cents, while Sky City Entertainment Group and Contact Energy fell about 1 percent each. The benchmark NZX-50 index closed up 0.87 points or 0.02 percent at 5,795.85.
In economic releases, New Zealand's merchandise trade surplus narrowed as expected to NZ$123 million in April, Statistics New Zealand said - representing 3.0 percent of exports. Coming well below the NZ$631 million surplus in March, the headline figure beat forecasts for a surplus of NZ$98 million.
Elsewhere, India's Sensex was down half a percent on fears over possible interest rates hikes by the Federal Reserve and Malaysia's KLSE Composite index was down 0.2 percent, while Singapore's Straits Times index was little changed, Indonesia's Jakarta Composite index was up 0.7 percent and the Taiwan Weighted average rose 0.3 percent.
Singapore's gross domestic product expanded 2.6 percent year-over-year in the first quarter of 2015, the Ministry of Trade and Industry said in Tuesday's revision, beating expectations for 2.2 percent growth and up from the preliminary reading of 2.1 percent.
The U.S. markets were closed on Monday for the Memorial Day holiday. The European markets closed mostly lower in thin holiday trading Monday, with the Greek and Spanish stock markets hit hard due to concerns over Greece and a poor election result for the governing Popular Party in regional and municipal elections.
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