Japanese shares soared as the yen fell on Tuesday, with stronger-than-expected U.S. data and earnings inspiring gains across Asia.
Japan’s Nikkei Stock Average JP:100000018 +1.44% climbed 1.4%, South Korea’s Kospi KR:SEU +0.83% KR:SEU +0.83% rose 0.9%, and Australia’s S&P/ASX 200 index AU:XJO +0.18% AU:XJO +0.18% advanced 0.3%.
In the Chinese share markets, Hong Kong’s Hang Seng Index HK:HSI +0.28% rose 0.3%, while the Shanghai Composite Index CN:000001 +0.0050% traded up 0.6%.
After a slew of mixed data on the Chinese economy over the last few days that left investors unsure about both the state of the economy and future policy, investors are now bracing for Thursday’s China gross domestic product data.
Europe is set to start a two-day summit on Thursday amid uncertainty over if and when Spain would formally request aid from its European partners, a move required before the European Central Bank can start buying up Spanish bonds.
The Wall Street Journal and Financial Times each cited an unnamed Spanish official in separate reports as saying Madrid is ready to request a credit line from the European Central Bank.
Still, Spain doesn’t require any immediate funds from the European Stability Mechanism and has delayed making such a request due to concern about the effect on other euro-zone members, the Financial Times said. Read: Spain reportedly ready to seek aid
Good cue from Wall Street
Tuesday’s advance in Asia came after gains on Wall Street on Monday, with stronger-than-expected retail sales data and earnings from banking major Citigroup Inc. C +5.50% giving investors some reason for optimism on the U.S. economy. Read story on Monday’s U.S. stock gains.
“The retail sales result, combined with a good labor-market report and last week’s housing report, suggests that U.S. activity in the September quarter may be a bit stronger than initially expected,” said Matthew Sherwood, head of investment market research at Perpetual Investments.
Asia investors bought into Japanese exporters on Tuesday, as a data-strengthened U.S. dollar USDJPY +0.21% reached 78.88 yen, up from ¥78.71 in late trading on Monday and well above ¥78.41 late Friday. Read dollar edges up ahead of EU summit.
Toshiba Corp. JP:6502 +3.82% TOSYY +2.65% gained 3.4%, Sony Corp. JP:6758 +2.40% SNE +2.90% climbed 1.9%, and Citizen Holdings Co. JP:7762 +4.70% CHCLY -0.86% rallied 5%.
Softbank Corp. JP:9984 +9.57% SFTBY -4.97% rallied 9.3% in Tokyo to pare weekly losses to 18.1%, after the firm formally announced its planned purchase of 70% of U.S. mobile firm Sprint Nextel Corp. S -0.70% for approximately $20 billion, in a deal that would make Softbank one of the world’s largest telecom firms.
Globally exposed banks were performing well after the Citigroup figures.
“There’s an indirect connection,” as good results from the U.S. banking sector lift confidence elsewhere, said Michael Heffernan at Lonsec,
In Tokyo, Sumitomo Mitsui Financial Group Inc. JP:8316 +1.61% , SMFG +1.01% rose 2%, and Mizuho Financial Group Inc. JP:8411 +1.64% MFG +0.32% moved higher by 2.5%, while in Hong Kong, HSBC Holdings PLC HK:5 +1.21% HBC +1.23% UK:HSBA +0.45% gained 0.7%, and Standard Chartered PLC HK:2888 +2.06% UK:STAN +0.45% advanced 1.7%.
Some of the biggest percentage gainers in Hong Kong were in the property sector, however, as China Resources Land Ltd. HK:1109 +5.13% CRBJF +2.33% rallied 5% and China Overseas Land & Investment Ltd. HK:688 +2.27% CAOVY +0.61% CAOVY +0.61% improved by 2.5%.
But China Gas Holdings Ltd. HK:384 -4.19% CGHLY 0.00% dropped 3.3% in Hong Kong on Tuesday, after China Petroleum & Chemical Corp. HK:386 -0.89% SNP +0.87% and ENN Energy Holdings Ltd. HK:2688 +2.83% XNGSY +0.51% ended their bid for the firm, according to reports.
China Petroleum & Chemical, better known as Sinopec, fell 0.6%, while ENN shares were up 2%.
Commonwealth Bank of Australia CBAUF +1.94% CBAUF +1.94% climbed 0.3% in Australia while National Australia Bank Ltd. AU:NAB +1.06% NAUBF +1.33% outperformed with a 1.1% gain.
Retail and food conglomerate Wesfarmers Ltd. AU:WES +1.18% WFAFY +1.08% moved up 1.2% in Sydney after an anonymously sourced report that the firm is reviewing the ownership structure of 700 million Australian dollars ($717 million) worth of supermarket properties. Read: Wesfarmers reviewing Coles supermarket properties .
South Korea, meanwhile, saw support from blue-chip exporters, with Kia Motors Corp. KR:000270 -3.08% KIMTF -1.81% rising 2%, Samsung Electronics Co. KR:005930 +0.31% SSNLF +3.31% up 2.2% and SK Hynix Inc. KR:000660 -1.33% HXSCL -23.34% rising 2.7%.
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