Microsoft's Stellar Earnings Spark Rise in Asian Markets

In Asia Friday, markets headed north with Japan's Nikkei 225 Index surging 2.3% to 9,431. In Hong Kong, the Hang Seng Index rose 1.1% to 20,815 and in China the Shanghai Composite Index inched up 0.4% to 2,572.

Japanese investors were toasting Microsoft's better-than-expected earnings, as the company's report helped push electronics makers higher. "Microsoft's earnings reiterated that demand for electronics in the second half is still positive," Monika Yang of Hamon Asset Management in Hong Kong told Bloomberg. Microsoft racked up a 48% increase in net income during the fourth quarter with a 22% rise in sales. Microsoft's success was helped along by the sale of about 175 million copies of its Windows 7 operating system, which it released in October.

Riding on Microsoft's coat tails, Japanese consumer electronics shares surged. Casio Computer skyrocketed 6.1%, Pioneer rallied 4.5%, Canon soared 3.5%, Panasonic climbed 3.3% and Mitsubishi Electric rose 3.2%. Electronics giant Sony racked up a 4.8% gain today. The company, which makes the popular PlayStation video game console, is hoping to patent cool new technology that would allow viewers to watch different programs at the same time on the same screen, according to toyandgadget.com. While you'd need special glasses to use it, it does away with the split-screen feature and could be the solution to household arguments about what to watch or play when.

Companies making electronic parts for cars also surged, with Alps Electric jumping 4.1% and Clarion, which specializes in car audio systems, leaping 3.1%. Fanuc, the maker of robotic machinery for industrial factories that wrap and sort foods and do other manual labor, climbed 5.2%.

Steel producer JFE Holdings got a 5% boost after announcing plans to invest in an Indian steel company called JSW Steel, says Bloomberg, while Komatsu, a mining machinery company making giant excavators and bulldozers, gained 4.3%.

Optimism spread to Hong Kong where big wins were scored by real estate developers. New World Development rallied 3.7%, Wharf Holdings, which operates the sprawling Ocean Terminal shopping mall, featuring Hong Kong's biggest Toys 'R Us store and a children's playground, jumped 3.4%. Henderson Land, which is currenlty defending itself against suspicion that it helped boost the price of apartments in one of its luxury buildings in Hong Kong, advanced 3.1%, with some analysts saying it's time to buy the now heavily discounted stock. Sun Hung Kai added 1%.

Pearl Oriental Innovation, is now poised to get into the oil exploration business through a deal with China Petrochemical Corp., according to infocastFN.com. Trading in Pearl Oriental was suspended yesterday in advance of the announcement, but resumed today, quickly shooting up as high as 20% before settling back down with an 11.5% gain for the day.

In China, hopes are running high among investors that the government will loosen policies to curb growth, and this week the country's main index managed to add 6.1%. Today's gainers included Industrial & Commercial Bank of China, which climbed 1.4%, and Bank of China, which rose 0.6%. Agricultural Bank of China, which just made history by becoming the world's biggest IPO, leaped 2.9%. This week's advances may indicate that Asian markets could head higher than many people expect.