Asian shares mostly lower on regional tensions


TOKYO (AP) — Shares were mostly lower in Asia on Tuesday as tensions flared between China and Vietnam though hopes for further monetary easing in Europe helped push Japan's benchmark to its highest level in six weeks.

In the latest clash, a Chinese fishing vessel rammed and sank a Vietnamese fishing boat in the disputed South China Sea, Vietnamese state media reported Tuesday, likely sharpening friction over overlapping territorial claims.

But Tokyo's Nikkei 225 gained 0.9 percent to 14,729.33, the highest level since early April, after European Central Bank President Mario Draghi held out the prospect of further stimulus for the region.

He said the bank needed to guard against a "negative spiral" of low inflation that could be a drag on growth. His comments spurred hopes the Bank of Japan might add to its already lavish monetary stimulus this year and also augured stronger European growth that would benefit Japanese exporters.

Elsewhere in Asia, South Korea's Kospi fell 0.8 percent to 1,994.06 and Hong Kong's Hang Seng index slipped 0.2 percent to 22,917.92. Shares gained in Taiwan and Malaysia but fell in Australia, New Zealand, Singapore and Shanghai.

With Thailand in the midst of a military coup and China at odds with Vietnam and other neighbors, investors are feeling cautious, said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.

"Maybe we need more good news coming out for the market to make a good move," Yip said.

Investors were heartened Monday by the Standard & Poor's 500 finish last week above the 1,900 level for the first time, but watching to see what comes next after markets in the U.S. and Britain were closed for a long weekend.

In Europe, Germany's DAX rose 1.3 percent to close at 9,892.82 and France's CAC 40 gained 0.8 percent to 4,526.93.

In other markets, the euro rose to $1.3656 from $1.3648 on Monday. The dollar was trading at 101.96 yen, versus its close of 101.91 yen.

In energy markets, oil prices rose. Benchmark crude for July delivery was up 3 cents to $104.38 in electronic trading on the New York Mercantile Exchange.