Most Asia markets up as rally presses ahead

Hong Kong - Asian markets mostly extended their rally on Tuesday with Tokyo boosted by a jump in the dollar against the yen after a top Federal Reserve official said the bank could lift interest rates as soon as next month.

But Hong Kong was dragged lower as HSBC fell 5.0% after reporting a huge plunge in 2016 profits, with the bank citing protectionist fears under Donald Trump and uncertainties caused by Brexit as reasons for the slump.

It said ongoing volatility and surging populism around the world would continue to hit its bottom line.

"We highlight the threat of populism impacting policy choices in upcoming European elections, possible protectionist measures from the new US administration impacting global trade, uncertainties facing the UK and the EU as they enter Brexit negotiations," group chairman Douglas Flint said in a statement filed to the Hong Kong stock exchange.

Hong Kong was down 0.8% by the close, with HSBC falling to HK$65.55 per share.

Elsewhere stocks were mostly up. With Wall Street's trading floors closed for the Presidents Day holiday there was little to drive business but the optimism that was prevalent last week continued to flow in early exchanges.

Europe provided a tepid lead with hopes of a bailout deal for Greece tempered by signs of growing anti-EU sentiment in France ahead of the presidential election in April and May.

Dollar climbs

In Tokyo the Nikkei index closed 0.7% higher as exporters were lifted by the weaker yen.

The dollar climbed to ¥113.65 from ¥113.09 on Monday following comments from the head of the Fed's Philadelphia branch, Patrick Harker, that a March rate rise was not "off the table at this point".

Expectations of a hike have increased since Donald Trump was elected president in November as dealers bet his big-spending, tax-cutting plans will fan inflation.

And the latest reading on prices increases, as well as healthy jobs growth and factory activity, have reinforced that view.

Shanghai closed 0.4% higher while Seoul put on 0.9%. Sydney was down 0.07% while Singapore was up 0.03%.

Mining giant BHP Billiton gained nearly one percent in Sydney as it reported on Tuesday a dramatic rebound in half-yearly profits on the back of surging coal and iron ore prices and improved productivity.

Investors are keeping an eye on the release this week of Fed minutes from its most recent policy meeting hoping for fresh clues about its plans for rates, while preliminary factory figures are also due this week from the US and Europe.

In early European trade, London lost 0.2%, Paris added 0.1% and Frankfurt gained 0.4%.