Most Asian markets extended gains on Monday, with Japanese stocks staging a strong rebound from a weak start as many major exporters climbed on the yen’s retreat.
Stocks in multiple regional markets overcame choppy early trading to turn solidly higher amid some optimism over the outcome of the Federal Reserve’s policy decision later this week, especially on the pace of its monthly bond purchases.
“The most likely outcome is the Fed will reconfirm that unemployment remains stubbornly high, several key indicators continue to fluctuate, and the U.S. economy is still not holding its own. All this should see the Fed holding the line on the $85-billion stimulus [program], with tapering to be reassessed in three to four months,” said IG Markets strategist Evan Lucas.
After opening lower, the Nikkei Stock Average bounced back strongly to finish 2.7% higher, extending the benchmark’s 1.9% bounce Friday, when it snapped a three-day losing streak.
The gains helped the Nikkei emerge from the bear-market territory where it ended in the past two sessions. At its closing level Monday, the Nikkei is off 18.3% from the 52-week high it reached on May 23. The broader Topix also climbed 2.7%.
Elsewhere in Asia, Hong Kong’s Hang Seng Index climbed 1.2%, Taiwan’s Taiex added 0.7% and Australia’s S&P/ASX 200 advanced 0.7%.
On the downside, the Shanghai Composite and South Korea’s Kospi fell 0.3% each, unable to hold on to gains recorded earlier in the day.
The Sensex pulled 0.4% higher in Mumbai afternoon trading after the Reserve Bank of India left its benchmark lending rate unchanged at 7.25%, as expected, citing the risk of a potential increase in inflation despite a weakened domestic economy.
The broad gains came as equity index futures based on the Standard & Poor’s 500 Index and the Dow Jones Industrial Average traded sharply higher on Monday, after U.S. stocks ended lower on Friday.
Major movers
In Tokyo, shares of several firms with a significant international presence advanced as the dollar strengthened from the levels seen in late North American hours Friday.
Shares of Japan Tobacco Inc. jumped 5%, and drug maker Eisai Co. gained 6%, while tire maker Bridgestone Corp. climbed 4.7%.
Property developers extended gains in Hong Kong, with China Overseas Land & Investment Ltd. rising 1.9%, and Cheung Kong Holdings Ltd. adding 3.7% after announcing that the company and its joint-venture partners were buying a Dutch waste-processing firm.
Among energy producers, shares of Cnooc Ltd. climbed 4.1%, and those of PetroChina Co. added 3%, after benchmark U.S. crude-oil futures jumped on Friday.
Shares of China Everbright Bank Ltd. climbed 2.1% in Shanghai, and those of New China Life Insurance Co. advanced 2.9% in Hong Kong, following news that Central Huijin Investment Ltd., a key state-owned shareholder in major Chinese banks and financial firms, had increased its stake in the two firms.
On the downside, the Hong Kong-listed shares of Industrial & Commercial Bank of China Ltd. tumbled 4.7% as they began trading without rights to a dividend.
Source : Marketwatch
