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Asian markets mostly rise, Dollar up

Hong Kong - The dollar pushed higher on Thursday after the Federal Reserve upgraded its outlook on the US economy, fuelling talk of a September interest rate hike, while Asian shares were mostly up after a Wall Street rally.

With the mood on global markets a little more upbeat than at the start of the week, oil prices edged up although concerns over a supply glut are keeping a lid on rises.

Tokyo jumped 1.08% to 20 522.83 as the yen weakened against the greenback and top firms including Nintendo reported strong earnings. Sydney rose 0.81% to close at 5 669.5 thanks to a pick-up in iron ore prices.

Shanghai suffered a late sell-off to end 2.20% lower, dropping 83.40 points to 3 705.77, while Hong Kong followed the losses to close down 0.49% at 24 497.98.

Seoul dropped 0.91% to 2 019.03, hurt by selling in heavyweight Samsung Electronics after it reported disappointing earnings.

After a two-day policy meeting, the Fed said in a statement that the world's top economy had expanded "moderately" in recent months and the jobs market had strengthened, but it noted continued "soft" business investment and exports.

It also said inflation was below target, though it put much of that down to falling energy prices and to cheaper imports caused by the strong dollar.

While it gave no more clues about its plans for raising interest rates, analysts said the wording suggested September was now a strong possibility for a rate rise.

On Wall Street, the Dow rose 0.69%, the S&P 500 gained 0.73% and the Nasdaq advanced 0.44%. The gains were the second in a row after US stocks suffered a five-day losing streak.

"The Fed statement was similar to the last and it was a very modest upgrade to previous language," said Raiko Shareef, a markets strategist at Bank of New Zealand in Wellington.

Samsung woes

"That will make the two following employment reports we get more important, and strong results would support our view of a September liftoff," Shareef told Bloomberg News.

Economist Chris Low of FTN Financial added that minor changes in the language showed that "the past six weeks data pushed the (policy committee) a little closer to raising rates".

"But they are still waiting for more good news before they actually pull the trigger," he said.

The chances of an earlier rate rise lifted the dollar. In Tokyo trade it fetched ¥124.20, compared with ¥123.91 in New York.

The euro bought $1.0955 and ¥136.02 against $1.0990 and ¥136.19 in US trade.

Seoul was dragged down by Samsung, which tumbled 2.85% in morning trade after releasing second-quarter earnings showing net profit dropped 8.0% owing to weak sales of its flagship S6 smartphone.

The firm has now seen its net profit decline for five straight quarters year-on-year, mainly due to heightened competition in an increasingly saturated smartphone market that it had dominated for years.

Shanghai was unable to continue its upward momentum from Wednesday's rally, which came after a three-day sell-off that saw the composite index sink more than 11% - including an 8.48% collapse on Monday.

Investors are nervously watching Beijing's handling of the latest market crisis, worried that efforts to provide support - put in place at the start of the month to prevent a meltdown -- will not be enough.

In oil trade US benchmark West Texas Intermediate for September delivery added 12 cents to $48.91 and Brent crude for September jumped 45 cents to $53.83.

Prices rallied Wednesday after data showed an unexpected weekly fall in US crude inventories. The figures provide some respite for dealers after a recent sell-off, although the black gold remains beaten down by fears over a global share glut, a strong dollar, an expected flood of Iranian crude at the end of the year and weak demand.

Gold fetched $1 086.80 an ounce compared with $1 096.20 late on Wednesday.

In other markets:

- Mumbai rose 0.51% to end at 27 705.35 points.

Dr Reddy's Laboratories rose 5.23% to 3 907.55 rupees, while Sun Pharmaceutical Industries fell 1.89% to 814.30 rupees.

- Kuala Lumpur gained 0.05% to end 1 699.92.

Sime Darby added 2.14% to 8.60 ringgit, Public Bank rose 0.21% to 18.88 ringgit while Maybank dipped 0.77% to 8.99 ringgit.

- Singapore closed 1.05% lower at 3 249.52.

Singapore Telecom fell 3.75% to end at Sg$4.11 and DBS Bank finished at Sg$20.71, down 1.38%.

- Jakarta ended down 0.18% at 4 712.49.

Concrete manufacturer Wijaya Karya Beton gained 3.43% to 1 055 rupiah, while construction firm Wijaya Karya fell 5.54% to 2 645 rupiah.

- Taipei gained 1.03% to 8 651.49.

Taiwan Semiconductor Manufacturing jumped 2.2% to Tw$138.5 while Hon Hai Precision Industry was 0.66% lower at Tw$90.9.

- Wellington rose 0.36% to 5 891.85.

Fletcher Building was up 1.02% at NZ$7.90 and Warehouse Group was steady at NZ$2.56.

- Manila closed up 0.37% to 7 510.39.

Globe Telecom was up 1.34% at 2 572 pesos, Philippine Long Distance Telephone added 1.32% to 2 914 and SM Prime Holdings climbed 1.19% to 21.25 pesos.

- Bangkok was closed for a public holiday.

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