Asia stocks climb higher

Asian stock markets were higher on Monday with Japanese property shares rising on expectations that the Bank of Japan will decide to ease monetary policy further this week, while Chinese shipbuilders rallied in Singapore on hopes of pick up in European demand.

Japan’s Nikkei Stock Average was up 0.9%, Australia’s S&P/ASX 200 was 1.2% higher, and South Korea’s Kospi Composite rose 0.4%.

Hong Kong’s Hang Seng Index rose 1.3%, Taiwan’s main index was up 0.4% and India’s Sensex was 1.1% higher. Markets in China were closed for the national day. Dow Jones Industrial Average futures were 27 points lower in screen trade.

Japanese shares rose, helped by gains in exporters’ stocks after the yen weakened against the dollar and the euro in late morning trade. Expectations that the Bank of Japan will announced additional monetary easing steps on Tuesday also underpinned the market.

“There is speculation that the BOJ will make a preemptive move to bring the yen down before the (Federal Open Market Committee) meeting” in November where Federal Reserve is widely expected to carry out additional easing, said Kenichi Hirano, operating officer at Tachibana Securities.

Twenty three of the 33 Topix subindexes were higher, with exporters rising, led by Sony up 2.0%, Honda Motor up 1.5% and Sharp tacked on 1.5%.

Japanese real estate shares continued to outperform on growing expectations that the BOJ will ease policy further. Mitsubishi Estate added 2.2%, Mitsui Fudosan rose 2.1% and Sumitomo Realty & Development gained 0.8%.

Singapore-listed Chinese shipbuilding companies were sharply higher after Chinese Premier Wen Jiabao said Sunday Beijing will continue to buy Greek bonds and announced the creation of a $5 billion fund to help Greek shipping companies buy Chinese ships. Cosco was up 2.2%, JES International rose 2.9% and Yangzijiang gained 1.1%.

Korean stocks were helped higher by the 14-consecutive session of net foreign purchases. “Investor sentiment remains positive as foreign funds are flowing into emerging markets amid a weak U.S. dollar,” said HI Investment & Securities’ Kim Seung-han.

The won’s recent strength was putting some pressure on exporters but was helping energy and airline stocks.

“Tech shares are under pressure due to foreign-exchange risk (from the strong won) but valuation-wise, it’s a good time to snatch those up,” Kim added. Banks were higher on expectations for solid third-quarter earnings while securities firms were buoyed by active stock trading recently with KB Financial up 1.3% and Hana Financial up 2.1%.

SK Energy was up 3.8% while Korean Air Lines rose 0.9% and Asiana Airlines rose 3.4%.

Australia’s S&P/ASX 200 rose to a three-day high at 4,643.9 in the wake of Wall Street gains though the trading volumes were well below normal levels. The market was expected to consolidate for the rest of the day because of holidays in the state of New South Wales and China.

IG Markets Institutional Trader Chris Weston said the equities bull market was back on track after its recent weakness, with the outlook for materials stocks particularly strong. “I’m still quite positive,” said Weston; “It was good to see the manufacturing data holding up in China and the U.S. I think equities could break convincingly higher early this month because we have so much tier-one economic data from around the world. Friday’s U.S. non-farm payrolls data will really underscore what’s going to happen in regard to QE (quantitative easing).”

Materials and financials sectors were leading the gains, with BHP Billiton up 1.4%, Rio Tinto up 1.1% and major banks up 0.4% to 2.2%.

Malaysian cigarette makers were lower after the government hiked cigarette prices, raising concerns of weaker sales and an increase in illicit cigarette trade. BAT Malaysia was down 1.0% and JT International lost 0.9%.

The latest price hike may result in a 10% annual contraction in sales as consumers may turn to cheaper contraband cigarettes, OSK Research said in a research note.

Elsewhere in the region, New Zealand’s NZX-50 was 1.2% higher, Philippine shares were down 0.1%, Malaysian shares gained 0.5%, while Singapore’s Straits Times Index rose 0.3% and Thai shares were up 0.6%.

After a quiet start, some selling interest in the yen pushed it down against the U.S. dollar and the euro; the dollar was at Y83.58 against the yen, from Y83.32 in late New York trade Friday, while the euro was at Y115.07, from Y114.83. The single currency was at $1.3760 from $1.3784.

Dollar/yen traders were focused on the Y82.87 level, the 15-year low marked just before Japanese authorities intervened to weaken the yen on Sept. 15, said Osao Iizuka, head of foreign exchange trading at Sumitomo Trust and Banking.

Following comments on Friday by Federal Reserve Bank of New York President Dudley that the U.S. central bank is almost certain to opt for additional easing, the BOJ could further pressure the pair lower this week if it failed to impress markets with more easing measures of its own at the end of its regular two-day policy-setting meeting Tuesday, Iizuka said. “While concern over further intervention may keep the dollar supported above Y82.87 for today, the BOJ meeting (Tuesday) could bring that level closer in sight, depending on the outcome.”

Lead December Japanese government bond futures touched a session high of 143.46, its highest level since June 2003, on growing expectations that the BOJ will ease monetary policy further this week. The contract was recently up 0.07 at 143.39 points. The yield on 10-year Japanese government bonds was down one basis point at 0.945%

Spot gold was at $1,315.70 per troy ounce, down $2.90 from New York’s Friday close. November Nymex crude oil futures were down three cents at $81.55 per barrel on Globex.
Source: WSJ

Leave A Reply

Your email address will not be published.