Asian stocks posted widespread gains on Friday as news from both Spain and Greece where the respective governments outlined plans to further cut spending and raise taxes sent positive signals to financial markets. The proposed austerity measures announced amid fierce public protests and continued hopes for fresh Chinese stimulus following a record amount of liquidity injection into the banking system by China's central bank this week spurred some bargain hunting in beaten down shares following recent losses.
Spain unveiled yesterday a crisis budget for 2013 based mostly on severe budget cuts aimed at meeting deficit-reduction targets before the debt-laden nation formally requests a bailout. The publication of bank stress results later today will reveal how much more money is needed to recapitalize the Spanish banking system.
Meanwhile after reaching a "basic agreement' on a multibillion-euro austerity plan demanded by its international lenders, Greece's three-party coalition government said it would need an extra 13-15 billion euros to finance a two-year extension to its bailout.
Japanese stocks reversed early gains to end lower, weighed down by the strong yen against the dollar. The Nikkei average lost 0.9 percent, while the broader Topix index fell 1.1 percent. Auto makers were among the worst hit, with Toyota Motor and Honda losing 2-3 percent after data released today showed Japanese auto exports fell 5.4 percent in August following seven months of upturn. Heavyweight Fanuc edged down 0.9 percent, while semiconductor-related shares such as Sumco, Tokyo Electron and Advantest lost 2-3 percent.
Among those that gained, Fast Retailing edged up 0.2 percent and Japan Tobacco added 1.7 percent. Aozora Bank shares rallied 3 percent following the previous session's steep losses after the lender announced that top shareholder Cerberus Capital Management LP would sell its 55 percent stake in the bank. Steel maker Kobe Steel rallied 3.3 percent on reports the company may buy back part of its stake from the new company that will be created through the merger of Nippon Steel Corp. and Sumitomo Metal Industries.
China's Shanghai Composite index rallied 1.5 percent, extending gains for a second consecutive session, led by metal stocks and property developers. Hong Kong's Hang Seng index gained 0.4 percent. Mainland Chinese markets will be closed for week-long holidays from Oct. 1 to Oct. 7, while the Hong Kong market will remain closed on Monday and Tuesday.
Australian stocks posted modest gains, led by cyclical stocks as concerns over Europe eased. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended up about 0.1 percent each. BHP Billiton edged up marginally, but Rio Tinto slid 0.4 percent and Fortescue shed 0.9 percent. Gold miner Newcrest climbed 3.3 percent as gold prices hovered near one-week high.
Oil & gas exploration company Santos rose 0.7 percent and Aurora Oil and Gas added 2 percent after crude futures rebounded about 2 percent from two-month lows overnight on rising geopolitical tensions in the Middle East. Among major banks, ANZ, NAB and Westpac rose modestly, while Commonwealth edged down 0.1 percent.
South Korea's Kospi average rose 0.4 percent, with talk of fresh Chinese stimulus moves and relief over austerity measures outlined by Spain and Greece underpinning sentiment ahead of two local holidays next week. Shares of Korea Aerospace Industries soared 14.8 percent after Korean Air Lines and Hyundai Heavy Industries placed preliminary bids to buy a combined 41.8 percent stake in the company worth $1.02 billion. Tech shares also gained ground, with heavyweight Samsung Electronics up 0.6 percent, while LG Electronics added 2 percent.
New Zealand shares rose notably, led by Air New Zealand following its share buyback announcement. Shares of the national carrier climbed 5.5 percent, while the benchmark NZX-50 index ended 0.7 percent higher amid relatively light volumes. Fletcher Building, the nation's largest construction company, rose 1.6 percent, SkyCity Entertainment, the casino and hotel operator, gained 1.6 percent, container terminal operator Port of Tauranga added 1.9 percent and outdoor clothing and equipment retailer Kathmandu Holdings jumped 4.2 percent.
NZX rose 0.9 percent after the stock exchange operator appointed former commerce minister Simon Power and 2015 Cricket World Cup head Therese Walsh to its board. Retailer Pumpkin Patch, which reported a 20 percent decline in full-year earnings yesterday, fell 1.7 percent, heavyweight Telecom slid 1.7 percent and would-be bank Heartland New Zealand lost 1.5 percent.
Elsewhere, India's benchmark Sensex was last moving up 1.2 percent, Indonesia's Jakarta Composite index rose 0.9 percent, Malaysia's KLSE Composite added half a percent and the Taiwan Weighted average gained 0.4 percent, while Singapore's Straits Times index was little changed.
On Wall Street, stocks rose notably overnight, as optimism about the possibility of further stimulus from China, Spain's new budget plans and the relatively upbeat jobless claims data outweighed a pair of disappointing reports on durable goods orders and Q2 GDP. The Dow rose half a percent, the tech-heavy Nasdaq gained 1.4 percent and the S&P 500 added a percent.
by RTT Staff Writer
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