Hong Kong: Most Asian markets rose on Monday as sentiment improved and investors snapped up bargains, with Japan’s main index halting a 12-day slide to end its longest losing streak in more than a half-century.
The benchmark Nikkei 225 Stock Average climbed 0.9% to 13,360.04 points. It had shed more than 8% of its value during the recent fall, the longest since 15 straight trading days of losses starting 28 April 1954.
Positive trend: A man walks past a stock price board in Shanghai,China. The benchmark Shanghai Composite Index rose 4.6%.
Markets in China, Hong Kong, South Korea, Singapore and India also gained on Monday. Australia and Malaysia stocks dropped. In Japan, investors hunting for bargains in financial, real estate and export sector helped lift the market. Mizuho Financial Group Inc. surged 6%, while Sumitomo Realty and Development Co. Ltd jumped 4.8%. Orix Corp., Japan’s biggest nonbank financial firm, jumped 6.3%.
The gains in the non-bank sector reflected the business opportunity in commercial lending given the wariness of Japanese banks on offering credit, said Deutsche Securities analyst Masamitsu Ohki in a research note.
Gains in equity markets throughout the region, as well the dollar’s rise against the yen, also helped sentiment. A weaker yen inflates profits at Japanese exporters.
Canon Inc. and Toyota Motor Corp. both closed higher. Among losers were Japan Tobacco Inc. and trading house Mitsui and Co. Ltd.
In China, meanwhile, the benchmark Shanghai Composite Index gained 4.6% to close at 2,792.4 points. Airlines rose amid hopes of a tourism surge for August’s Beijing Olympics. Oil companies, real estate and financial firms also rose, regaining ground lost in recent weeks on concerns about high oil prices and a possible interest rate hike.
Investors’ sentiments were buoyed by expectations of healthy corporate profits and lower inflation, which would ease pressure for a rate hike, said Zhang Lichang, a market strategist with Guotai Jun’an Securities. He said the recent market decline has brought prices into the range of “reasonable valuation,” attracting investors.
“Companies in the banking, coal and steel industries will have good mid-term results,” he said. “We expect the market may have a 20%-30% rebound.” Hong Kong stocks got a boost from mainland China’s markets, benefiting from rosy forecasts for Chinese banks and speculation Beijing will take measures to help certain industries, analysts said.
“The market interprets that the government will intervene and act to prop up the market and not let it fall, especially before the Olympics,” said Francis Lun, general manager of Fulbright Securities Ltd.
China Merchants Bank Co. Ltd shot up 9.2%. The bank said first-half net profit could more than double compared with the same period a year ago, Xinhua news agency said. China CITIC Bank Corp. Ltd rose 4.4% after projecting first-half profits would gain 150%.
Mainland developers rose amid hopes of government aid. China Overseas Land and Investment Ltd soared more than 12%. Hong Kong property company Sun Hung Kai Properties Ltd climbed on an analyst upgrade.
Shares of China Oilfield Services Ltd were suspended as it announced plans to buy Norway’s Awilco Offshore ASA for $2.5 billion. In currency dealings, the dollar advanced to 107.52 yen on Monday afternoon. The euro fell to $1.5624 ahead of a German industrial production report due out later in the day. The dollar’s rise versus the Japanese currency followed a speech in the morning by Bank of Japan governor Masaaki Shirakawa, who predicted that the country’s inflation would keep rising.