Asia Stocks Advance To Pare Cyprus Losses

Asia stocks moved higher Tuesday to take back some losses made the previous day, when investors reacted to news that a bailout for Cyprus would include a tax on bank deposits.

Japan’s Nikkei Stock Average  rose 2%, South Korea’s Kospi  advanced 0.6%, and Australia’s S&P/ASX 200 index  rose 0.5%.

Hong Kong’s Hang Seng Index  also ticked up 0.5%, while the Shanghai Composite index  advanced 0.3%.

Monday’s market action saw U.S. stocks fall but then creep back to end well off session lows.

Earlier in the global day, Asian investors had suffered deep losses on news that Cyprus planned a one-off tax on bank deposits as part of a 10 billion euro ($12.9 billion) bailout deal, agreed with international creditors.

“Markets look a bit calmer as the panic following the news of levy of bank deposits in Cyprus as part of a €10 billion bailout for the country, eased,” Crédit Agricole’s Asia head of global market research Mitul Kotecha said of Tuesday’s early stock action.

“There’s no sign of bank runs elsewhere in the euro zone, and the go-ahead to make the deposit levy more progressive while maintaining the total amount at around ¬€5.8 billion has helped to calm tensions,” said Kotecha.

The Eurogroup indicated late Monday that it was open to negotiating the details of the tax, which is due to be debated in the Cypriot parliament at some point, although the timing remains unclear.

As the concerns over Cyprus eased a bit, attention switched back to local themes in some markets.

In Tokyo, inflation plays were performing strongly again, returning to their recent gains built on anticipation of further monetary easing from the Bank of Japan.

Among policy-sensitive shares, real-estate firm Tokyu Land Corp.    rose 4.6%, while banking group Sumitomo Mitsui Trust Holdings Inc.   traded higher by 6.1%.

Retailers were also in favor with investors, with J. Front Retailing Co.  up 3.1%, and Uniqlo-owner Fast Retailing Co.   advancing 2.4%.

Japanese tech exporters benefited from the dollar’s rebound against the yen , with the greenback returning solidly above the ¥95 level.

Notable gains included a 4.5% surge for Sony Corp.   , a 6.7% climb for Alps Electric Co.   and a rise of 4.4% for Advantest Corp.  .

Some Europe-exposed names bounced back in Hong Kong, with Esprit Holdings Ltd.   up 4.8%, Prada SpA  adding 1.6%, and ports operator Cosco Pacific Ltd.   rising 2%.

Shares of luggage maker Samsonite International SA   climbed 2.5% after it posted a more-than-70% increase in annual profit.

Australian miners and banks were notably gaining ground in Sydney, with banking giant Commonwealth Bank of Australia [ higher by 1%, and rare-earths extractor Lynas Corp.   up 2.1% in the resources sector.

South Korean action saw a 2% gain for heavyweight consumer electronics giant Samsung Electronics Co.  .

Other tech firms on the move included SK Hynix Inc.  , up 0.5%, and LG Electronics Inc.   , higher by 1.6%.

Marketwatch

Comments
Loading...