ASIA MARKETS: Asia Stocks Trade Mostly Up, But Shanghai Falls

By V. Phani Kumar and Michael Kitchen, MarketWatch

HONG KONG (MarketWatch) -- Most Asian stocks rose modestly Wednesday in tentative trade ahead of an announcement on Greece from a meeting of euro-zone finance ministers, while Japanese shares resumed a rally on further yen weakness.

Japan's Nikkei Stock Average , which ended slightly lower on Tuesday, bounced 0.8% as the dollar strengthened to hover close to the 82-yen level, aiding shares of the nation's exporters.

Hong Kong's Hang Seng Index added 0.4%, and South Korea's Kospi gained 0.2%.

On the downside, Taiwan's Taiex was little changed, and Australia's S&P/ASX 200 was down 0.2% in choppy trade.

The Shanghai Composite Index briefly dropped below the psychologically important 2,000-point level, before recovering. The index hadn't closed below that level since January 2009. At the midday break, it was down 0.4% at 2,001.76.

Nice Wang, a strategist at Yuanta, wrote in a note to clients that institutional investors on the Chinese mainland were likely to stay on the sidelines on uncertainty following personnel changes at a recent meeting of the Communist Party, but added that valuations were attractive and that Hong Kong stocks were likely to benefit.

"Given concerns regarding the European debt crisis and the U.S. fiscal cliff are easing ... negative investor sentiment has faded and will likely push up the Hang Seng Index," Wang said, adding stocks subject to China consumption and urbanization themes were likely to benefit.

Shares of China Overseas Land & Investment Ltd. (CAOVY) and foods company Want Want China Holdings Ltd. each rose 1.5%.

Shares of HSBC Holdings PLC (HBC) climbed 1.2% after The Wall Street Journal reported that the lender was in talks with China's sovereign-wealth fun to sell its stake in Ping An Insurance Group Co. Ping An (PNGAY), which had dropped in the last two trading sessions amid concerns about the possible sale, advanced 0.5%.

Property and resource stocks dropped on the mainland Chinese bourses, with Poly Real Estate Group Co. sliding 0.8% and Jiangxi Copper Co. (JIXAY) shedding 0.9%.

Meanwhile, the rally in Tokyo came as the yen hit a seven-month low against the U.S. dollar, and also fell sharply against the euro, spurring exporters.

Automobile makers all saw strong gains on the weakened currency. Toyota Motor Corp. (TM) rose 1.9%, Honda Motor Co. (HMC) added 2.1% and Mazda Motor Corp. (7261.TO) climbed 3.4%.

Weak Japanese trade data released 10 minutes ahead of the stock-market open helped exacerbate the yen's fall. The Finance Ministry reported a 6.5% year-on-year drop in Japanese exports, fueled by another tumble in shipments to China, amid tensions between the two nations.

Following the data, the dollar extended overnight gains to hit  ¥81.89, up from  ¥81.67 ahead of the numbers.

Among technology stocks, Sony Corp. (SNE) added 1.2%, Fujitsu Ltd. (FJTSY) rose 1.7%, and Tokyo Electron Ltd. (8035.TO) added 1.9%.

In Seoul, Samsung Electronics Co. (SSNLF) rose 2.3%, while among auto makers, Hyundai Motor Co. rose off its recent losses, adding 0.5%.

Australian equities saw losses, however, as weakness for miners and energy firms helped drag Sydney lower.

An almost 3% drop in benchmark U.S. crude-oil futures overnight amid hopes for an Israeli-Palestinian cease-fire, hit the energy sector.

Woodside Petroleum Ltd. (WOPEF) lost 1.1% and Santos Ltd. (SSLTY) retreated 2.2%.

Some miners also saw losses, with Rio Tinto Ltd. (RIO) retreating 0.8% and Fortescue Metals Group Ltd. (FSUMY) down 1.9%.

Retailer David Jones Ltd. (DJS.AU) fell 6.6% after reporting a below-forecast 0.3% increase in sales for its fiscal first quarter.

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