Asian stocks rose broadly on Monday, with strong U.S. earnings, signs of recovery in the Eurozone and upbeat economic data out of China underpinning sentiment.
European Central Bank (ECB) Chief Mario Draghi told the World Economic Forum in Switzerland that he expects the Eurozone economy to begin recovering in the second half of this year following the recent measures carried out by the central bank including the long-term refinancing operation and the outright monetary transaction program. In another sign of easing market conditions, the ECB said that 278 Eurozone banks would repay 137.16bn euros of three-year loans they borrowed ahead of time.
China's Shanghai Composite index rallied 2.4 percent, led by brokerages and banks after the country's stock exchange said they will double the number of companies domestic investors can short-sell or buy using borrowed money.
Investors also cheered further signs of recovery in the world's second-largest economy after data showed profits at China's industrial firms increased for a fourth successive month in December. Amid signs of economic recovery, industrial profits increased 17.3 percent to CNY 895.2 billion in December from a year earlier, the latest figures from the National Bureau of Statistics showed.
Hong Kong's Hang Seng index rose 0.4 percent, tracking strong gains in Chinese market and a positive close on Wall Street Friday on the back of upbeat corporate earnings reports.
Japan's Nikkei index fell 0.9 percent as investors locked in some gains after the benchmark index briefly rose above 11,000 early in the session, boosted by a weaker yen. The Topix index shed 0.4 percent. The yen gained against major currencies in late Asian deals, sending stocks lower. Fanuc plunged 7 percent after the robot maker cut its full-year profit outlook to Y116 billion from Y136 billion previously.
Advantest tumbled 5.3 percent on a Nikkei report about a possible decline in its fiscal 2012 earnings. Tokyo Electron shed 2.4 percent, Mitsubishi Electric retreated 4.4 percent, China-sensitive Komatsu lost 1.3 percent and Hitachi Construction Machinery fell 1.5 percent. Sony jumped 9.1 percent on a brokerage upgrade and as reports said China is considering lifting a 12-year ban on video-game consoles. Nintendo shares advanced 3.4 percent.
Meanwhile, the Japanese government raised its economic growth forecast, predicting the economy will expand 2.5 percent in the fiscal year starting April 2013, up from 1.7 percent growth estimated in August, thanks to a weakening yen and Prime Minister Shinzo Abe's ambitious policy measures aimed at ending deflation and reviving growth.
South Korea's Kospi average slid 0.4 percent, dragged down by heavyweight Samsung Electronics after the company warned a strengthening won may cut its operating profit by 3 trillion won this year. Shares of the smartphone maker fell 3.2 percent to a 10-week low. Hyundai Motor fell 1.2 percent, while shares of its affiliate Kia Motors retreated 1.5 percent.
In economic news, South Korean consumer confidence jumped to its highest level in eight months in January as households turned more upbeat about the prospects of their own living conditions as well as the domestic economic outlook, the Bank of Korea said in a statement. The consumer confidence index rose to 102 in January from 99 in December.
New Zealand shares rose marginally amid a lack of corporate news ahead of the earning season that gets underway in earnest next week. The benchmark NZX-50 index rose 0.1 percent in relatively thin trading. Logistics firm Freightways rose 2.3 percent, Skellerup Holdings, a manufacturer of milking equipment and rubber goods, advanced 1.9 percent, market operator NZX gained 0.8 percent and heavyweight Telecom added 0.2 percent, but Fonterra shareholders' fund units fell 1.4 percent on allegations relating to traces of a fertilizer chemical found in some milk products.
Elsewhere, India's benchmark Sensex was little changed, Singapore's Straits Times index was moving up 0.2 percent and the Taiwan Weighted average added 0.6 percent, while Indonesia's Jakarta Composite index was down half a percent. The Australian market was closed for a public holiday.
U.S. stocks rose on Friday as encouraging earnings news from the likes of Procter & Gamble and Starbucks helped investors shrug off a report from the Commerce Department showing an unexpected drop in new home sales. The Dow and the S&P 500 rose about half a percent each to reach fresh five-year highs, while the tech-heavy Nasdaq added 0.6 percent.
by RTT Staff Writer
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