Tokyo stocks hit fresh five-month highs as fears over yen strength continued to ease while Asian stocks advanced to their highest levels for a week.
The region’s markets became the first to welcome the Irish bail-out deal, neutralising for the time being an issue that has recently depressed sentiment for global equities.
The knock-on effect of a strengthening euro also helped Japanese exporters to Europe’s markets.
“The market has started to recognise just how resilient [Japanese] exporters have become toward yen strength,” said Fumiyuki Takahashi, of Barclays Capital Japan.
“Their profitability has been improving more than the market had expected. Money has been flowing in, especially from overseas,” he added, noting that the Nikkei 225 Average could rise to 10,500 by year-end.
The Nikkei rose 0.9 per cent to 10,115,19 on Monday, having gained 3 per cent last week and more than 10 per cent so far in November, helped by the yen’s slip from a 15-year high against the dollar scaled earlier in November. The broader Topix index rose 0.7 per cent to 875.48.
A strong performance by Japan’s exporters was key to the advances with Komatsu, the world’s second-biggest construction machinery maker, at one stage hitting its highest in more than two years before edging back slightly to close 2.9 per cent higher at Y2,311.
“It was symbolic to see shares such as Komatsu rising convincingly,” said Takashi Ohba, of Okasan Securities. “I had expected China’s tightening measures would hurt Komatsu, which has a close link to the country, but the strong rise proves that foreign investor appetite is very strong in taking more positions in Japanese stocks.”
Toyota, the world’s biggest carmaker, gained 1.1 per cent to Y3,300 and was the most actively traded stock in the Topix. Kyocera, an electronics maker that accounts for 18 per cent of its sales in Europe, jumped 2.4 per cent to Y8,570 and was the biggest support for the Nikkei’s advance.
Canon, a camera maker that derives about 80 per cent of its revenue abroad, gained 1 per cent to Y4,050 while Sumco, a silicon wafer maker that makes 60 per cent of its revenue outside Japan, climbed 3.7 per cent to Y1,331.
Region-wide, the FTSE Asia-Pacific index rose 0.7 per cent to 255.47, its third session of gains.
Indian stocks made their biggest advances in more than two weeks as investors viewed a recent sell-off as overdone.
The BSE Sensex index jumped 1.9 per cent to 19,957.59, recovering from a near-7 per cent retreat over the past two weeks to its lowest levels in two months. “We are seeing a bounceback as the short-term indicators are showing shares are in oversold territory,” said Alex Mathews, of Geojit BNP Paribas Financial Services.
UBS said the sell-off provided a good entry point into banks, lifting those stocks. ICICI Bank, India’s second-biggest lender, rose 2.7 per cent to Rs1,180.05, its first gain in four days. HDFC Bank, the third-biggest, increased 3.3 per cent to Rs2,379.9, its steepest climb for more than three months.
Hong Kong stocks fell for a second day, led by property developers in the wake of Friday’s government measures to prevent a real estate price bubble. Sino Land, a Hong Kong developer controlled by billionaire Robert Ng, tumbled 5.6 per cent to HK$15.40. The Hang Seng fell 0.4 per cent to 23,524.02 and the Shanghai Composite index dipped 0.2 per cent to 2,884.37.
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