* Technology sector shares rise to highest since August
2008
* Big 4 China bank lending down sharply in August-local
media
* Commodities rise, LME copper up 2.4 percent
By Kevin Plumberg
HONG KONG, Aug 28 (Reuters) - Asian stocks rose on Friday,
led by consumer and technology-related shares as confidence in
a sustainable recovery grew, though stocks in Shanghai bucked
the trend and dropped 3 percent on worries about a fall in bank
lending.
The U.S. economic contraction in the second quarter was not
as bad as expected, and gross domestic product actually grew if
inventories were stripped out, raising hopes that pent-up
demand for Asia's exports would return slowly. []
Indeed, despite weakness on Chinese markets, modest gains
on Wall Street helped support Asian stocks.
Stocks of companies involved in making parts for technology
exports, such as Shin-Etsu Chemical in Japan, Taiwan
Semiconductor and Samsung Electronics in South Korea, gave a
big boost to their domestic indices.
Japan's Nikkei share average <> rose 0.5 percent, just
below the highest intraday level since Oct 6, which was hit on
Wednesday. Shares of Kyocera <6971.T> and Canon Inc <7751.T>
were among the biggest supports to the index.
Japanese stock market gains came despite a record decline
in core consumer prices and an all-time high in the domestic
jobless rate. Some analysts looked towards this weekend's
elections and a likely win by the opposition.
"All these negative trends can be turned around if DPJ does
win Sunday elections, inspires confidence, and successfully
implements its plans to boost domestic consumption," said
Dariusz Kowalczyk, chief investment strategist with SJS Markets
in Hong Kong in a note.
The MSCI index of Asia Pacific stocks outside Japan rose
0.6 percent <.MIAPJ0000PUS>, near the top of a narrow range
maintained in August. However, the technology sector index for
the region rose 1.5 percent <.MIAPJIT00PUS>.
Hong Kong's Hang Seng index <> underperformed the
region, slipping 0.6 percent, and dragged down Shanghai stocks
<>, which fell as much as 3 percent on the day before
paring some losses. []
The decline in China's domestic market caused the
Australian dollar to weaken. China is Australia's top trade
partner.
Local media reported new loans extended by four of China's
biggest state-owned banks in August slowed sharply from July.
"The market now expects new lending in August by all banks
will be at most a little more than 200 billion yuan," said
analyst Cao Xuefeng at Western Securities in Chengdu.
The lending estimate compares with an average monthly total
of more than 1 trillion yuan in the first half of this year.
Despite declines on Thursday in Asian and European stocks,
Wall Street posted small gains, thanks to strength in the
energy sector. That helped Asian markets gain momentum early in
the session.
While the global equity rally that has been lasted since
March sputtered a bit in August, investors have been steadily
putting their piles of cash to work.
Money market funds, a cash equivalent, saw a net outflow of
$5.75 billion in the latest week, bringing year-to-date
redemptions to around $250 billion, about half of what was
committed in 2008 to these funds, fund tracker EPFR Global said
in a note.
In the week to Wednesday, all equity funds tracked by EPFR
took in a net $7.32 billion and fixed income funds saw net
inflows of $4.59 billion.
CURRENCIES
The Australian dollar <AUD=> was largely unchanged on the
day at US$0.8386 after a 1.6 percent climb overnight, remaining
around a cent from an 11-month high around US$0.8480 reached
two weeks ago.
A steady flow of solid economic data has led dealers to
price in at least one quarter percentage point rise in the
Reserve Bank of Australia's base rate by November and speculate
on a possible move in October <RBAWATCH>.
"The data from Australia has been pretty strong, suggesting
the economy has a fair bit of momentum," said John
Kyriakopoulos, currency strategist at National Australia Bank.
"Interest rate markets are now bringing forward the prospects
of a rate hike to as early as October and that is helping the
Aussie."
The ICE Futures U.S. dollar index <.DXY> was subdued after
a 0.7 percent decline overnight kept it in a downward trend.
U.S. crude for October delivery rose 26 cents to $72.75 a
barrel <CLc1> after jumping $1.06 on Thursday.
U.S. economic data released on Wednesday was a shot in the
arm and helped confidence that energy demand will recover
further, overshadowing reports showing an increase in
inventories.
Metals prices also reflected optimism about the demand for
raw materials. Three-month copper on the London Metals Exchange
was up 2.4 percent to $6,425 a tonne <MCU3>.
(Additional reporting by Anirban Nag in SYDNEY and Claire
Zhang and Edmund Klamann in SHANGHAI)
(Editing by Don Durfee)
