Asian shares in broad-based rise

HONG KONG: Asian shares were generally strongly higher Tuesday, led by a sharp rise in Hong Kong, ahead of US Federal Reserve Chairman Ben Bernanke appearing before Congress.

Hong Kong's benchmark Hang Seng Index was up 1.5 percent to 19,408.50 in mid-morning trade, while the Shanghai Composite Index -- which hit a three-year low on Monday -- was up 0.55 percent at 2,159.78.

Sydney's ASX 200 was up 0.86 percent at 4,140.60, and the Kospi in Seoul rose 0.57 percent to 1,828.12.

There were several factors behind Hong Kong's surprise rise, said Jackson Wong, an investment manager at Tanrich Securities, including investors factoring in the possibilities of a new round of quantitative easing in the US and Chinese stimulus measures.

"There is some short-covering given the recent beating taking by China shares, especially the banking stocks," he told Dow Jones Newswires.

China said last Friday economic growth slowed to 7.6 percent year-on-year in the second quarter, its lowest level in more than three years, but the figures led to hopes Beijing would take steps to boost the world's second-largest economy.

Investors were also looking to two days of Congress testimony by Bernanke, scheduled to start later Tuesday, analysts said.

But in Tokyo, Barclays Bank chief currency strategist Masafumi Yamamoto warned: "If there is no indication (for more easing) from him, stocks and long-term US Treasury yields will fall on disappointment."

Wall Street had fallen overnight with the Dow Jones Industrial Average losing 0.39 percent on an unexpected drop in retail sales in June, which were down 0.5 percent against analyst forecasts of a 0.2 percent rise.

The euro gained against major currencies in Asian trade after the IMF said it was releasing 1.48 billion euros ($1.82 billion) in new funds to troubled Portugal.

The single currency fetched $1.2292 compared to $1.2271 in New York late Monday, and also rose against the yen, buying 96.97 yen from 96.40 yen.