The markets across the Asia-Pacific region extended their rally on Tuesday, boosted by the buoyant close on Wall Street overnight amid fairly encouraging economic data. However, the gains were modest due to profit taking after the previous day's big rally. Investors also expressed caution ahead of the release of stress test results on banks in the United States on Thursday. Additionally, lower U.S. stock index futures and oil prices checked big gains.

Financial markets in Japan, South Korea and Thailand were closed for national holidays. Japan's market will remain closed on Wednesday as well.

Crude oil rose to its highest close of the year on Monday, as investors bet the recession was fading after a rally in global equities markets and better-than-expected macroeconomic news in the United States, Europe and Asia offered hopes of a recovery in world energy demand. After closing at $54.47 a barrel, up $1.27 in New York trading overnight, crude oil edged down below $54 a barrel in Asian trading, as investors took some profits after a four-day rally.

In the U.S. the major averages ended at their multi-month closing highs overnight, as better than expected economic data generated some optimism about the outlook for the economy, particularly a recovery in the beleaguered housing market. A report from the National Association of Realtors showed that pending home sales index rose 3.2 percent in March following a revised 2.0 percent increase in February. Economists had expected the index to come in unchanged following the 2.1 percent increase originally reported for the previous month.

Separately, the Commerce Department released a report showing an unexpected increase in construction spending, which rose 0.3 percent in March following a 1.0 percent decrease in February. Economists had expected spending to fall by about 1.6 percent. The Dow Jones Industrial Average rose 2.61%, the Nasdaq Composite index gained 2.58% and the S&P 500 index rallied 3.39%.

The Australian market shed some of its early gains to close modestly higher, helped by strong gains in resource stocks. The benchmark S&P/ASX200 index closed at 3,890, up 7 points or 0.19% and the broader All Ordinaries index rose 16 points or 0.42% to 3,862.

Big miner BHP Billiton rose 1.95%, its rival Rio Tinto soared 5.47% and Iluka Resources advanced 3.24%. Gold miners also moved up, tracking a firm spot price of gold in Sydney. Newcrest Mining rose 3.28%, Newmont mining gained 3.74% and Lihir Gold edged up 0.34%.

OZ Minerals added 3.14% after the miner announced board and management changes following an agreement with China's Minmetals. Steel maker BlueScope Steel was in a trading halt after it announced a plan to raise as much as $2.68 billion in capital.

Media stocks closed mostly lower. APN News & Media fell 1.05% after it downgraded earnings guidance for calendar 2009. Fairfax tumbled 5.22% and Seven Network declined 2.26%, but News Corp surged up 6.18%.

Ports and rail operator Asciano Group jumped 5.19% on saying that it has a new long-term take and pay contract with Macarthur Coal to haul coal exports by rail in Queensland. Retailers closed mixed. Harvey Norman Holding jumped 4.72%, David Jones edged up 0.30%, but Woolworths slipped 0.42%.

Westpac Banking closed flat ahead of its interim 2009 results announcement on Wednesday. National Australia Bank rose 0.23% and investment bank Macquarie Bank rallied 3.70%, but ANZ slipped 0.42% and Commonwealth Bank declined 1.04%.

Energy stocks closed mixed even as crude oil gained $1.27 a barrel in New York trading overnight. While Woodside Petroleum jumped 4.05%, Oil Search moved down 1.13% and Santos slipped 1.05%.

In economic news, the Reserve Bank of Australia left its key interest rate unchanged as expected at a 49-year low. At its meeting, the board decided to leave the cash rate unchanged at 3% after cutting it by quarter points on April 7. The central bank has slashed the cash rate by 125 basis points since December 2008 and the official cash rate now stands at its lowest level in 49 years.

The New Zealand market closed sharply higher, helped by gains on Wall Street overnight and favorable cues from the other markets in the region. The benchmark NZX-50 rose 53 points or 1.91% to 2,819, the highest closing level since November 2008.Turnover was worth $118.6 million.

Cyclical stocks closed higher, with Contact Energy up 4.45%, Fletcher Building up 0.43% and Fisher & Paykel Appliances up 9.80%. Market heavyweight Telecom rose 1.46% ahead of a hearing on Vodafone's application for unspecified damages and an injunction in the High Court at Auckland Wednesday.

Stock exchange operator NZX rallied 4.60%, shrugging off declines in the number and value of trades on the New Zealand stock exchange in April.

SkyCity rose 2.59% on reports that it is keen to open a casino in Wellington but it would require an amendment to the Gambling Act. Technology stock Rakon surged up 13.64% after securing $4.4 million of government funding for its research and development program

Retailer Hallenstein Glasson closed up 0.38%, children's clothing retailer Pumpkin Patch gained 3.31% and jeweler Michael Hill rallied 3.51%. Energy stock TrustPower rose 2.10%, Vector moved up 2.35%, resin maker Nuplex jumped 5.71% and carpet maker Cavalier surged up 6.06%.

Among other prominent gainers, Auckland Airport closed up 1.18%, Fisher & Paykel Healthcare advanced 1.97% and Mainfreight added 3.30%.

Warehouse Group closed down 0.79%, Steel and Tube ended down 0.68%, Sanford declined 0.89%, Lion Nathan slipped 0.33% and Telstra moved down 1.15%, while

PGG Wrightson closed unchanged.

On the economic front, New Zealand's main export commodity prices rose 2.5% month-over -month in April, following a 1% increase in March, reports said citing the latest Commodity Price Index from the ANZ Bank. The commodity price index increased for the second consecutive month in April, recording the biggest gain in nearly two years. However, annually, the commodity price fell 29.5% in April from the previous year.

The Chinese market rose modestly to end at a nearly nine-month high amid reports that new Yuan-denominated loans in April would fall to 600 billion Yuan from a record high of 1.89 trillion Yuan in the previous month. The benchmark Shanghai Composite Index, which tracks both A and B shares, rose 7 points or 0.29% to 2,567, the highest closing since August 8.

The Hong Kong market was modestly higher after a three-day rally. The benchmark Hang Seng index was last trading at 16, 430, up 49 points or 0.30% after hitting a six-and-half-month high of 16,580.54 in early trading.

Meanwhile, the Indian market was trading choppily on profit taking after posting its biggest one-day gain in six months on Monday. While underlying sentiment is upbeat due to sustained buying by foreign funds; investors, especially domestic financial institutions have been expressing caution amid concerns of a possible fractured mandate in general elections. The benchmark for the Indian market, the Sensex was last trading at 12,132, down 3 points or 0.02% over the previous close.

IT stocks Infosys, TCS and Wipro and HDFC, Mahindra and Mahindra, ITC and Reliance Industries were the major decliners. However, second-line stocks were trading firm, with the small-cap and the mid-cap indexes on the BSE moving up around 1.50% each.

Among the other markets in the region, Singapore's STI Straits Times index was up 1.72% and Taiwan's TWII Weighed index closed up 0.78%.

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