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Asian shares higher on Wall St rally

Hong Kong - Asian markets mostly rose on Friday after a Wall Street rally that was fuelled by better-than-forecast jobs data.

However, trading remains tentative as US lawmakers remain unable to reach agreement over a budget just days before a deadline kicks in that could see parts of the federal government shut down.

Tokyo fell 0.26%, or 39.05 points, to 14 760.07 but in the afternoon Hong Kong gained 0.69%.

Sydney added 0.24%, or 12.6 points, to 5 307.1, while Seoul closed 0.22% higher, adding 4.48 points to 2 011.80. Shanghai rose 0.20%, or 4.29 points, to 2 160.03.

On Wall Street Thursday the Dow and S&P enjoyed their first rises since September 19, when they hit fresh record highs.

US investors were cheered by data from the Labor Department showing new claims for unemployment benefits sank by 5,000 to 305,000 last week, beating forecasts of a rise to 325 000.

And while pending home sales fell 1.6% last month, it was better than the 2.3% fall expected.

The Dow advanced 0.36%, the S&P 500 tacked on 0.35% and the Nasdaq was 0.70% higher.

The gains came despite growing tensions on Capitol Hill, where Republicans and Democrats are locked in yet another stand-off over government funding as the Monday night deadline approaches.

With Democrats refusing to agree to Republican demands that President Barack Obama's healthcare bill be cut back there are fears that hundreds of thousands of US state employees will be sent home from Tuesday.

More critical, though, is a looming row over the US debt ceiling, which must be raised before mid-October, when the government runs out of money to pay its bills.

If the spending limit is not hiked Washington would be unable to service its debt obligations and in turn default. A similar stand-off in 2011 sent global markets sliding and led to a historic downgrade of the country's AAA sovereign rating by Standard & Poor's.

In currency trading the dollar bought¥ 98.69 in afternoon Tokyo trade, compared with ¥98.94 late in New York. The euro was at $1.3493 from $1.3488, while it also fetched ¥133.16 against ¥133.48.

Japanese shares rallied Thursday on reports that the government was considering a cut to corporation tax to offset an expected hike in sales tax.

However, the Nikkei was unable to add to those gains Friday despite data showing inflation at a five-year high as most of the increase was driven by higher fuel bills. Energy imports soared in the wake of the Fukushima atomic disaster in 2011, forcing the shutdown of Japan's nuclear reactors.

On oil markets New York's main contract, West Texas Intermediate for delivery in November, dipped 32 cents to $102.71 in afternoon trade, while Brent North Sea crude for November was down 13 cents at $109.08.

Gold cost $1 324.80 at 09:00 compared with $1 335.92 on Thursday.

In other markets:

-- Wellington added 0.36%, or 17.21 points, to 4 782.68.

Air New Zealand was up 3.78% at NZ$1.51, Telecom rose 1.28% to NZ$2.37 and Warehouse was steady at NZ$3.77.

-- Taipei rose 0.56%, or 46.0 points, to 8 230.68.

Taiwan Semiconductor Manufacturing Co. rose 1.48% to Tw$103.0 while Hon Hai was 0.66% higher at Tw$76.3.


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