Asian shares climbed to a three-month high on Monday, joining a global rally triggered by better-than-expected U.S. economic data and optimism that European leaders will be able to resolve their debt crisis.
The U.S. Labor Department report showed stronger than expected job growth in July, with non-farm payroll employment increasing by 163,000 jobs in the month following a downwardly revised increase of 64,000 jobs in June. However, the unemployment rate edged up to 8.3 percent in July from 8.2 percent in June, surprising economists, who had expected the unemployment rate to come in unchanged.
Concerns about Europe's debt-ridden economies eased after inspectors and Greek government officials said that significant headway had been achieved on further spending cuts that Greece must adopt to secure a EUR 31.5-billion tranche of new aid that is vital to keep the country afloat.
Commodities edged lower and the euro weakened against the dollar after reports said U.S. banks have reduced their exposure to troubled eurozone countries using hedges such as credit default swaps.
Japanese shares rallied in thin trading, with the Nikkei average climbing 2 percent to hit a near three-week high as strong U.S. jobs data eased concerns over the global economy. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 1.6 percent higher. Financials led the rally, with Nomura Holdings up 4.1 percent and Daiwa Securities rising 2.2 percent.
Euro-sensitive Canon advanced 3.5 percent and Nikon added 4 percent, benefiting from a weaken yen after Greece and its creditors agreed on the need for more budget cuts to comply with bailout terms. Sony ended flat after Moody's Investors Service placed its long-term credit rating under review for a possible downgrade, citing the yen's strength, weak demand and "structural challenges" at the company.
Sharp plunged 5.7 percent after Taiwan-based Hon Hai Precision Industry Co. said it would renegotiate the price for purchasing a stake in the Japanese consumer electronics maker. Toyota Motor rose 2.5 percent as the automaker posted its largest quarterly net profit in four years and revised upwards its 2012 global sales target. Shares of Honda Motor rose 2.8 percent, while Isuzu Motors jumped 6.4 percent on robust Q1 earnings. Asahi Glass jumped 7.3 percent after Nomura Securities raised its rating on the stock.
China's Shanghai Composite index added a percent after recent sell-offs despite caution ahead of domestic inflation and trade data due out later this week. Hong Kong's Hang Seng index advanced 1.7 percent to end near a three-month high.
Australian shares rose sharply on optimism about the health of the U.S. economy. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index gained about 1.2 percent each, with metal stocks rallying after copper futures climbed by more than 2 percent on Friday.
Rio Tinto jumped 4.1 percent, BHP Billiton rose 2.2 percent and gold miner Newcrest Mining added 2.1 percent. Fortescue Metals rose 1.9 percent after the iron ore producer obtained a $1.5 billion loan to help fund the expansion of its operations in Western Australia.
Shares of Integra Mining soared 27 percent after Silver Lake Resources offered to buy the company for $426 million in shares to create a gold miner with a market value of nearly $1 billion. In the financial sector, Westpac, NAB, Commonwealth and ANZ ended up less than a percent each. Retailer Harvey Norman rose a modest 0.3 percent after it blamed deflationary price pressures in television sets and computers for an expected 40 percent drop in fiscal-year profit.
In economic news, Australian inflation rose 0.2 percent in July from the previous month amid a rise in energy costs due to the imposition of the carbon tax from July 1, according to the TD Securities - Melbourne Institute monthly survey.
South Korea's Kospi average jumped 2 percent to a seven-week high, buoyed by upbeat U.S. data and continued hopes for near-term ECB bond intervention to bring down high borrowing costs for Spain and Italy. The ECB and the Fed didn't announce any new stimulus measures last week, but hinted at future policy action to tide over the current difficult economic situation.
Among the prominent gainers, market heavyweight Samsung Electronics and rival SK Hynix soared about 4 percent each. Shares of STX Group affiliates rose, with STX Offshore & Shipbuilding gaining 4 percent on reports of a stake sale in an affiliate company.
New Zealand shares rose modestly, joining a regional rally as strong U.S. non-farm payroll employment data eased global growth worries. The benchmark NZX-50 rose 0.4 percent, with heavyweights Telecom and Fletcher Building pacing the gainers. Telecom, the largest listed company on the exchange, rose 1.1 percent to its highest level since August 2008, while shares of Fletcher Building, the nation's largest construction company, gained 1.6 percent to close at a one-month high.
Rural services firm PGG Wrightson rallied 3.2 percent, outdoor clothing and equipment company Kathmandu Holdings advanced 2.6 percent and carpet maker Cavalier added 2.5 percent. Exporter Fisher and Paykel Healthcare led the decliners, falling 2.6 percent as the kiwi dollar held near a three-month high. Fishing company Sanford ended unchanged after the U.S .government withdrew one of the claims in its US Federal District Court case against the company.
Elsewhere, India's benchmark Sensex was up 1.5 percent, Indonesia's Jakarta Composite edged up 0.1 percent, Malaysia's KLSE Composite gained 0.3 percent, Singapore's Straits Times index was rising 0.7 percent and the Taiwan Weighted average added a percent.
U.S. stocks soared on Friday, thanks to an encouraging report on services sector activity and better-than-expected jobs data. The Dow jumped 1.7 percent to a three-month high, the tech-heavy Nasdaq advanced 2 percent and the S&P 500 added 1.9 percent.
by RTT Staff Writer
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