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Asian shares mostly higher but Russia-Ukraine tensions weigh

Asian shares mostly rose on Monday (Aug 18) but gains were capped by the latest round of tensions between Russia and Ukraine despite some progress cited in the "difficult" negotiations between both sides.

HONG KONG: Asian shares mostly rose on Monday (Aug 18) but gains were capped by the latest round of tensions between Russia and Ukraine despite some progress cited in the "difficult" negotiations between both sides.

Also weighing on sentiment was a report showing China's foreign direct investment slumped to a two-year low, adding to a series of downbeat data about the world's second largest economy.

But bargain hunting pushed Shanghai higher, gaining 0.57 per cent, or 12.74 points, to an eight-month closing high of 2,239.47 while Hong Kong ended flat, edging up 0.52 points to 24,955.46.

Sydney gained 0.37 per cent, or 20.6 points, to 5,587.1, but Seoul lost 0.49 per cent, or 10.09 points, to 2,053.13 while Tokyo closed flat, inching up 4.26 points, to 15,322.60.

In Thailand, news that the economy grew 0.9 per cent in the second quarter - dodging recession after the military ended months of political deadlock with a coup - failed to produce a rally, with stocks shedding 0.28 per cent, or 4.26 points, to close at 1,542.36. Southeast Asia's second largest economy still looks set for a disappointing year, with officials clipping the growth outlook for 2014 - forecasting 1.5-2.0 per cent expansion on Monday, down from a previous estimate of 1.5-2.5 per cent.

US shares rebounded late on Friday to end mixed after an early bout of selling on news that Ukraine had shelled Russian armoured vehicles after they entered its territory. The Dow Jones Industrial Average ended down 0.30 per cent at 16,662.91, after earlier having shed 0.50 percent on the news.

Worries that the incident would lead to a direct clash between the two ebbed after Moscow denied the incursion and Ukraine's foreign minister agreed to meet his Russian counterpart in Berlin on Sunday.

The two sides ended the "difficult" talks on the crisis with no concrete advances but "some progress", host Germany said, as clashes continued on the ground. The nature of the progress was not disclosed by either party, but Germany's Foreign Minister Frank-Walter Steinmeier stressed the need for both nations to avoid "sliding ever deeper into a direct confrontation".

DOLLAR EXPECTED TO GAIN

In currency markets, the dollar edged down to ¥102.32 in afternoon Asian trade, compared with ¥102.34 yen in New York on Friday.

The greenback is expected to gain in volatile forex trading this week, ahead of a speech on Friday by US Federal Reserve chief Janet Yellen at the central bank's annual economic policy symposium as investors look for any hint of a change to the Fed's interest-rate plans. Last month, Yellen told Congress the Fed would hold its near-zero interest rate policy until the US economy strengthens, but may raise rates if the jobs market kept improving.

The euro bought US$1.3393 and ¥137.05 against US$1.3397 and ¥137.11 in US trade.

In oil markets, US benchmark West Texas Intermediate for September delivery was down 62 cents at US$96.73, while Brent crude for October fell 92 cents to US$102.61. Gold traded at US$1,302.78 an ounce at 0927 GMT compared to US$1,313.53 an ounce late on Friday.

In other markets:

-- Jakarta rose 0.15 per cent, or 7.79 points, to close at 5,156.75.

Car maker Astra International was up 0.33 per cent to 7,675 rupiah, while Bank Permata fell 0.36 per cent to 1,375 rupiah.

-- Kuala Lumpur shed 0.14 per cent, or 2.56 points, closing at 1,861.75.

Utility giant Tenaga Nasional slipped 0.16 per cent to 12.30 ringgit, Telekom Malaysia declined 0.48 per cent to 6.24 and RHB Capital added 3.11 per cent to 9.28 ringgit.

-- Manila gained 0.27 per cent, or 19.07 per cent, to 7,027.58.

Top-traded Philippine Long Distance Telephone Co. bucked the trend to fall by 0.43 per cent to 3,236 points while Ayala Land Inc. rose 1.88 per cent to 32.60 pesos.

-- Mumbai advanced 1.10 per cent or 287.73 points to end at 26,390.96, having touched a new high of 26,413.11 points during the session.

Gitanjali Gems rose 8.70 per cent 69.95 rupees, while Amara Raja Batteries rose 7.29 per cent to 577.40 rupees.

-- Taipei fell 0.71 per cent, or 65.5 points, to 9,141.31.

Taiwan Semiconductor Manufacturing Co was 0.81 per cent lower at NT$123.0 while Hon Hai Precision Industry was unchanged at NT$108.0.

-- Singapore eased 0.06 per cent, or 1.99 points, to 3,312.78.

Oversea-Chinese Banking Corp was flat at S$10.20 while Singapore Telecommunications was 0.26 per cent lower at S$3.90.

-- Wellington lost 0.14 per cent, or 6.96 points, to 5,071.12.

Genesis Energy was down 1.37 per cent at NZ$1.80 and Spark was off 2.08 pecent at NZ$2.82.