Asian stocks rose broadly on Monday after EU ministers approved a 10 billion euro bailout deal for Cyprus that would help the country avoid bankruptcy and potential turmoil across the Eurozone. The last-ditch agreement with international creditors calls for Cyprus' troubled Laiki Bank to be shut down and split, while deposit holders in Bank of Cyprus will have to take a major "haircut". Laiki will effectively be shuttered, with thousands of job losses.
An earlier attempt to work out a similar deal collapsed last week after the Cypriot parliament overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout. The new bailout package provides a durable and fully financed solution to the underlying problems facing the Mediterranean island nation and places it on a sustainable path to recovery, IMF Managing Director Christine Lagarde said.
Tokyo stocks rebounded strongly from a sharp fall at the end of last week, although trading volume remained relatively thin indicating waning investor interest. The Nikkei average rallied 1.7 percent following Friday's 2.4 percent fall, while the broader Topix index advanced 0.8 percent. Export-linked shares like Sony, Kyocera and Advantest rose about 3 percent each, buoyed by the yen's weakness.
Financial firms and realty companies gained ground on hopes of more monetary easing steps at the Bank of Japan's next policy meeting in early April. Nomura Holdings rose 0.7 percent, Mitsubishi UFJ Financial Group gained 1.6 percent, Credit Saison advanced 3 percent, Mitsubishi Estate gained 2.7 percent and Sumitomo Realty & Development jumped 3.8 percent. Heavyweights Fast Retailing and Softbank rose 4.7 percent and 3.2 percent, respectively. Department store operator Takashimaya soared 7.5 percent on a Nikkei report that it plans to integrate its online apparel shops by year-end.
Chinese shares ended a choppy session slightly lower as investors adopted a cautious stance ahead of a slew of corporate earnings due this week. The benchmark Shanghai Composite index fell by 2 points or 0.07 percent to 2,327. Hong Kong's Hang Seng index gained 0.6 percent in thin trading after losing almost 2 percent last week.
Australian shares rose in light trading after Cyprus reached a last-minute rescue deal with international creditors to avert a disorderly default. The benchmark S&P/ASX 200 rose over a percent early in the session before paring gains to end half a percent higher, as investors waited for Moscow's reaction to the Cyprus bailout deal under which uninsured depositors at the Bank of Cyprus and Cyprus Popular Bank might lose as much as 40 percent of their money on deposits of more than 100,000 euros.
Banks ended on a firm note, with Commonwealth and NAB rising about half a percent each, while ANZ added a percent and Westpac advanced 1.7 percent. Global miner BHP Billiton edged down marginally, but Rio Tinto rose 0.6 percent, smaller rival Fortescue Metals Group gained 1.8 percent and gold miner Newcrest closed 0.2 percent higher. Leighton Holdings jumped 4.3 percent after the construction company announced the appointment of Bob Humphris as its new chairman.
Seoul shares rallied on institutional buying due to the improved risk appetite. The benchmark Kospi average climbed 1.5 percent, led by heavyweights. Samsung Electronics rose 2.8 percent to snap three-days of losses, while automaker Hyundai Motor added half a percent. South Korea's newly appointed finance minister, Hyun Oh Seok, said over the weekend that he would use all possible measures to boost the economic recovery as the yen's slide continues to threaten Korean exports.
New Zealand shares ended marginally lower despite firm regional cues. The benchmark NZX-50 index ended down 2 points or 0.05 percent at 4341, reversing early gains. Pumpkin Patch and Xero fell over 3 percent each, Fisher & Paykel Healthcare dropped 2 percent and Fletcher Building lost a percent, but Heartland New Zealand, Oceana Gold, Skellerup Holdings and NZX rose 1-3 percent. Outdoor equipment retailer Kathmandu Holdings shed 0.8 percent ahead of its interim results tomorrow.
Elsewhere, Indonesia's Jakarta Composite index rallied 1.2 percent, Malaysia's KLSE Composite added a percent, Singapore's Straits Times index was up 0.4 percent and the Taiwan's weighted average closed up 0.8 percent, while India's benchmark Sensex was down 0.3 percent.
U.S. stocks rose on Friday after Nike Inc. and Tiffany & Co. reported strong quarterly earnings and investors grew more optimistic that Cyprus would clinch a deal with its international creditors to avert a default. The Dow rose 0.6 percent, while the tech-heavy Nasdaq and the S&P 500 gained about 0.7 percent each.
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