Late bounce on Wall Street offers Asian markets some support

SYDNEY (Reuters) - Asian share markets crept cautiously higher on Tuesday after Wall Street notched up a late rally, but conviction was sorely lacking with Tokyo shut for a holiday and plenty of major events looming later in the week.

Australian stocks rose 0.3 per cent ahead of what is expected to be another round of record profit results by the country's major banks.

The South Korean market edged 0.1 per cent higher with Samsung Electronics reporting a 3.3 per cent fall in first quarter operating profit to 8.5 trillion (S$10.3 billion) won. That still pipped market forecasts of 8.4 trillion and its shares were steady in early trade.

The lack of momentum showed in MSCI's broadest index of Asia-Pacific shares outside Japan which was dead flat after retreating by 1 per cent on Monday.

Events in Ukraine provided an excuse for caution. The United States slapped sanctions on seven Russian government officials and 17 companies linked to Russian President Vladimir Putin in a fresh attempt to force Moscow to back down from its intervention in Ukraine.

Wall Street put in another erratic performance but mostly ended in the black. The Dow closed 0.53 per cent firmer, while the S&P 500 added 0.32 per cent. The Nasdaq finished flat amid falls in Amazon and Facebook.

What gains there were owed much to the M&A fever in pharmaceuticals. Pfizer Inc said it approached Britain's AstraZeneca Plc to reignite a potential US$100 billion (S$125.6 billion) takeover but was rebuffed, stoking speculation of a bidding war.

AstraZeneca shares rallied 14.4 per cent in London, while Pfizer rose 4.2 per cent. It was the biggest gainer in the Dow and the fourth-biggest by percentage points in the S&P 500.

The potential, albeit distant, that Pfizer might need pounds to pay for the bid gave speculators a reason to go long on sterling. The currency climbed to a four-and-a-half year peak on the dollar at US$1.6856 before fading to US$1.6808.

The euro followed the pound higher to as far as US$1.3879 , aided in part by a Reuters report playing down the chance of any near-term easing in euro zone monetary policy.

European Central Bank President Mario Draghi told lawmakers from Germany's ruling coalition on Monday that low inflation would persist in the euro zone but quantitative easing remains some way off, according to a source who took part in the meeting.