Asia mostly higher, earnings help Sydney

SYDNEY (MarketWatch) � Asian stocks traded mostly higher Wednesday, with earnings providing a tailwind for Australian firms and pulling the local share benchmark close to three-year highs, while exporters gained in South Korea but dropped in Japan.

South Korea�s Kospi KR:SEU �and Australia�s S&P/ASX 200 index AU:XJO �each rose 1.1%, with the Australian index vaulting over the 5,000 mark for the first time since mid-April 2010.

However, Japan�s Nikkei Stock Average JP:100000018 �slipped 0.2%, paring the benchmark�s weekly gains to 1.7%.

Hong Kong, Taiwanese and mainland Chinese markets remained closed Wednesday for the Lunar New Year holiday.

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Tuesday night, U.S. president Barack Obama said in his State of the Union speech that he would start talks on a potential trade free trade deal with the European Union. Read: Obama seeks to break free of budget fight.

Matthew Sherwood, investment market research head at Perpetual Investments, said that such a trade deal was a �long-awaited� effort to enhance trade links between the two largest economic regions in the world.

�I don�t think that free trade deals have detrimental effects on other regions,� he added, addressing the potential issue that areas such as Asia may lose out if such a deal is signed.

Each region has its comparative advantages, he said. Just as the U.S. has an low-cost energy advantage, Asia�s strength is low-cost labor, Sherwood said.

�Moves by politicians to increase the level of overall trade is a win-win situation,� in general, he said, adding that the deal may work to benefit to the global economy.

Setting the stage for Wednesday gains in Asia, the Dow Jones Industrial Average DJIA �ended Tuesday at a level not seen in more than five years, following a solid performance from U.S.-listed financial shares.

Barclays PLC UK:BARC �BCS �put in a particularly strong performance in New York, extending gains from London trading after the U.K. bank announced sweeping organizational changes, including 3,700 job cuts, while at the same time reporting a fiscal-year net loss. Read: Barclays puts its humble hat on.

/quotes/zigman/1653884 XJO 5,006.70, +47.70, +0.96% /quotes/zigman/181773 CBA 67.17, +1.65, +2.51% One-year price moves Commonwealth Bank of Australia�s outperformance versus the S&P/ASX 200

In contrast, Australia�s Commonwealth Bank of Australia AU:CBA CBAUF �on Wednesday reported a 6% increase in adjusted profit � with the figure exceeding analysts� expectations � and raised its interim dividend. Read: Commonwealth Bank first-half profit rises 1%.

The lender�s shares rose to their highest-ever level of 67.38 Australian dollars ($69.41) early in the session, before settling back to A$67.15 for a 2.5% gain.

Commonwealth Bank�s market capitalization is now well over the $100 billion mark, after a 34% rise for its shares over the past 12 months, with the Australian firm now one of the world�s most valuable banks.

Other top Australian companies updating investors on earnings included blood products group CSL Ltd. AU:CSL CMXHY , which traded up 1.1%, and Leighton Holdings Ltd AU:LEI LGTHY ,�which rose 7%.

Earnings reports also moved shares in Japan on Wednesday, with Pioneer Corp. JP:6773 �PNCOF �falling 7.1% after saying it plans to cut jobs and now expects to post a full-fiscal-year loss. Read: Pioneer expects net loss, plans to cut 800 jobs.

Shares of Olympus Corp. JP:7733 �OCPNF � dropped 1.6% after the health-technology firm posted a narrower quarterly loss, but trimmed its own full-year forecast due to weak camera sales.

Uncertainty over currency moves worked to depress share prices for some exporters in Japan.

The yen USDJPY �moved higher overnight after an official from the Group of 20 major economies signaled fellow members of the bloc weren�t endorsing Tokyo�s weak-yen policies, as previously believed. Read: Confusion reigns over G-7 position on yen.

Among firms under pressure in Japan on Wednesday, Sony Corp. JP:6758 �SNE lost 5% and Panasonic Corp. JP:6752 �PC traded down 3.3%.

South Korean exporters � which benefit when Japanese rivals lose competitiveness from a rising yen � booked some gains. Kia Motors Corp. KR:000270 �KIMTF �added 2.9%, and affiliate Hyundai Motor Co. KR:005380 �HYMTF �edged higher by 1.9%.