Asia Stocks Rally As Europe Signals Action
Asian stocks staged a broad-based advance Monday, extending gains made at the end of last week, as European leaders signaled that they are prepared to take stronger action to curb the region’s debt crisis.
Japan’s Nikkei Stock Average 100000018 rose 0.8%, as did South Korea’s Kospi SEU, while Australia’s S&P/ASX 200 index XJO advanced 0.9%.
Hong Kong’s Hang Seng Index HSI jumped 1.4%, though the Shanghai Composite Index 000001 moved against the regional trend, edging down 0.4%.
U.S. shares had rallied Friday to a weekly gain, with the Dow Jones Industrial Average DJIA closing over 13,000 for the first time since May 7. Read more on U.S. stocks.
The gains for global equity markets last week were triggered by comments from European policy leaders, which markets generally interpreted as a prelude to European Central Bank bond purchases.
More market-supportive comments emerged from Europe over the weekend, with the head of the Eurogroup, Jean-Claude Juncker, saying Sunday that the euro-zone members, their rescue fund and the European Central Bank will soon act to save the euro, according to a report. Read more on Juncker report.
“Expectations are running high that central bankers will deliver on further policy steps at the Federal Reserve, European Central Bank and Bank of England meetings this week,” said Mitul Kotecha, strategist at Credit Agricole.
Stimulus hopes saw investors overlook generally lackluster economic data in the U.S. and Europe last week — and in Japan on Monday, where volatile industrial production fell 0.1% in June compared to expectations of a 1.6% increase. Read more on Japan industrial-output data.
Banks were advancing in Hong Kong, with market heavyweight HSBC Holdings PLC 5 HBC HSBA up 1.3% ahead of its quarterly earnings results due later in the day, while Bank of China Ltd. 3988 BACHF rose 1.4%, and China Construction Bank Corp. 939 CICHF added 2.2%.
Japanese financials on the march included Daiwa Securities Group Inc. 8601 DSECF, up 1.4%. In Australia, Commonwealth Bank of Australia CBA CBAUF advanced 1.9%, and Australia & New Zealand Banking Group Ltd. ANZ ANEWF moved higher by 1.3%.
Hong Kong casino operators were also strong, with Sands China Ltd. 1928 rising 5.5% to cut its month-to-date losses to 5.1%.
Samsung Electronics Co. SSNLF surged 3.4% in Korea and Hyundai Motor Co. HYMTF advanced 2.2%.
In Tokyo, Fujifilm Holdings Co. 4901FUJIF climbed 6.2% after reporting a better-than-expected first-quarter operating profit of 20.9 billion yen ($265.9 million) on Friday.
Konica Minolta Holdings Inc. 4902 KNCAF climbed 5.8% after late last week reporting a 94% surge in quarterly operating profit to ¥6.3 billion.
On the downside of earnings-related action, Fujitsu Ltd. 6702FJTSY tumbled 12.5% after reporting a wider quarterly loss late last week.
Another decliner in Tokyo was Komatsu Ltd.6301 KMTUF, which lost 1.8% after Nikkei news reported weak Chinese sales would prompt the firm’s first operating-profit decline in 10 quarters.
Shipbuilder China Rongsheng Heavy Industries Group Holdings Ltd. 1101 fell 18.6% while Glorious Property Holdings Ltd. 845 dropped 14.4% in Hong Kong.
The drop came after the U.S. Securities and Exchange Commission on Friday accused Well Advantage Ltd. — wholly-owned by Zhang Zhirong, chairman of the two companies — of insider trading.
MarketWatch
