Asia stocks broadly higher on earnings optimism; Nikkei ends up 2.2%

asian_by-trifidAsian stock markets kicked the week off with strong gains on Monday, as market players looked ahead to a flurry of corporate earnings reports in the coming week.

Speculation that the Federal Reserve will maintain its stimulus program well into 2014 to support the U.S. economy supported sentiment.

During late Asian trade, Hong Kong’s Hang Seng Index edged up 0.4%, Australia’s ASX/200 Index ended 1.02% higher, while Japan’s Nikkei 225 Index closed up 2.19%.

In Tokyo, the Nikkei bounced off Friday’s two-week low as traders monitored movements in the currency market.

USD/JPY rose to hit a session high of 97.74, moving further away from Friday’s low of 96.93. A weaker yen increases the value of overseas income at Japanese companies when repatriated, improving the outlook for export earnings.

Automakers Toyota and Honda saw shares rise 1.8% and 1.95% respectively, while Sony and Sharp advanced 3.2% and 1%.

Japanese megabanks were also higher with shares of the nation’s largest lender Mitsubishi UFJ Financial Group gaining 2.3%, while Mizuho Financial Group and Nomura Holdings added 2.45% and 2.2% respectively.

Telecom firm KDDI saw shares rise 3% after a Nikkei report said that the company will likely report a record first-half group operating profit.

Meanwhile, in Australia, the ASX/200 Index rallied to a fresh five-year high as financials led gains.

National Australia Bank shares added 1.7%, while ANZ Banking Group and Westpac Banking Group rose 1.8% and 0.75%. Commonwealth Banking Group tacked on 1.5%.

Elsewhere, in Hong Kong, the Hang Seng inched higher, but remained near the previous session’s seven-week low amid ongoing concerns over tightening liquidity conditions in the Chinese banking sector.

China Construction Bank shares edged up 0.9%, despite reporting a lower-than-expected increase in third-quarter net profit.

Looking ahead, European stock market futures pointed to a higher open.

The EURO STOXX 50 futures pointed to a gain of 0.3% at the open, France’s CAC 40 futures added 0.4%, London’s FTSE 100 futures indicated a rise of 0.2%, while Germany’s DAX futures pointed to a gain of 0.3% at the open.

Investors looked ahead to the Federal Reserve’s upcoming policy meeting later in the week, amid expectations that the central bank will delay plans to start tapering stimulus until well into next year.


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