ASIA MARKETS: Asian Stocks Mostly Rise In Choppy Trade

By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Most Asian markets rose Wednesday after the Dow Jones industrials ended at a record high, although trading was choppy as concern that the Federal Reserve may taper its bond purchases tempered optimism.

"In the U.S., fundamentals continue to click into gear in the world's largest economy," said Niall King, an analyst at CMC Markets. "Equity valuations continue to out-pace economic growth, however, and with cash mounting on corporate balance sheets, the Fed must ponder whether their attempted stimulus is reaching its intended destination."

South Korea's Kospi rose 0.5%, Taiwan's Taiex gained 0.7% and China's Shanghai Composite climbed 0.5%.

On the downside, Hong Kong's Hang Seng Index retreated 0.6% after a two-day rally, while the S&P/ASX 200 slipped 0.1% in Sydney as a weakened Australian dollar led to further selling in high dividend-yielding stocks such as banks.

Japan's Nikkei Stock Average wavered in choppy trading amid lingering worries over an increase in the yields on government debt. It was up 0.1% at the midday break after dipping into losses a few times. The broader Topix index was up 1%.

The broad gains came after the Dow Jones Industrial Average (DJI) climbed to its highest closing level Tuesday in the wake of data showing an improvement in U.S. consumer confidence and real-estate market.

Shares of some exporters turned lower as the yen (USDJPY) strengthened after Bank of Japan Gov. Haruhiko Kuroda said the global economy has yet to completely shake off the adverse effects of the global financial crisis.

Sony Corp. (SHCAY) fell 0.6%, Sharp Corp. (SNE) dropped 4.3% and Mazda Motor Corp. (MZDAY) eased 0.7%.

Financial stocks were choppy amid volatility in the yields on Japanese government bonds, with Mizuho Financial Group Inc. (MFG) reversing early gains to drop 0.5%, while Sumitomo Mitsui Trust Holdings Inc. (SUTNY) shed 1.9%. Banks are the largest class of investors holding JGBs.

The yield on 10-year Japanese government bonds, which ended a little over 0.9% on Tuesday, rose further on Wednesday. The yield, which had risen as high as 0.94% earlier in the day, was at 0.92% by early afternoon, according to FactSet data.

Shares of Softbank Corp. (9984.TO) jumped 2.5% on reports the mobile service provider and Sprint Nextel Corp. (US-S) have reached an agreement with the U.S. to protect national security, clearing a hurdle in Softbank's plan to acquire the U.S. wireless operator.

In Sydney, stocks that pay high dividends led the market's retreat as the Australian dollar (AUDUSD) traded under 96 U.S. cents.

Shares of Commonwealth Bank of Australia dropped 1.5%, while Australia & New Zealand Banking Group (ANZBY) fell 1.2%, despite announcing a A$425 million share buyback.

Losses in Hong Kong came as investors locked in recent gains in banks and property developers. Shares of Industrial & Commercial Bank of China Ltd. (IDCBY) dropped 0.7%, China Overseas Land & Investment Ltd. (CAOVY) shed 1.9% and ports operator Cosco Pacific Ltd. (CSPKY) fell 3.2%.

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