Asian Markets, Fundamentals

Asian Stock Markets Advance Amid Accelerating Economic Growth, France Pledges to Support Greece

Asia Session Key Developments

• Asian Stocks Rally to Six-Week High
• Bank Lending in Japan Tumbles for the Seventh Month
• Japan Trade Surplus Widens More-Than-Expected on Exports

Stocks in Asia/Pacific began the week on a strong note, rallying to a six-week high following French President Nicolas Sarkozy stating that the euro region stands ready to rescue Greece should the government struggle to fund its budget deficit. Meanwhile, the economic docket overnight showed bankruptcies in Japan tumbled for the seventh straight month as emergency government programs helped companies stay afloat, with the gauge slipping 17.3% from the previous year, while bank lending weakened 1.5% during the same period amid expectations for a 1.7% decline. Moreover, the trade surplus widened to 1712.8B yen in January as exports jumped at an annual pace of 40.6%, which exceeded forecasts for a rise to 1249.5B yen, while the Eco Watchers Outlook survey surged to the highest since July 2009, with the index increasing to 44.8 in February from 41.9 in the previous month.

Nikkei 225                          10,595.92

Stocks in Japan extended Friday’s advance, leading the Nikkei 225 to rally 216.93 points (2.09%) on Monday and close at 10,585.92. Nine out of the ten components pushed higher, with consumer goods leading the way, rising 2.56%, while utilities retreated 0.13%. Shares of Yahoo Japan added 4.69% as Tokai Tokyo Securities upgraded the company’s rating from “neutral” to “above average,” while Dentsu Inc rallied 6.04% after reporting an 8.8% rise in February revenue.” In addition, Mitsui Mining & Smelting rose 2.00% amid the Nikkei English News reporting that the company plans to start recycling metals used in batteries for hybrid and electric vehicles as early as 2014, while Nissan Motor soared 4.71% as Dow Jones publicized that the automaker expects vehicle production at its two plants in Mexico to rise by about 20% this year.

Hang Seng                        21,196.87

The Hong Kong equity market pushed higher on Monday for the second day, leading the benchmark equity index to rise 409.90 points (1.97%) and close at 21,196.87 as all nine components advanced on the day. Shares of PetroChina advanced 2.80% amid the company, along with Royal Dutch Shell made an offer worth more than A$3.3 billion to acquire Arrow Energy, while Li & Fung, the largest supplier of toys and clothing to Wal-Mart, added 4.20% as the U.S. unemployment rate unexpectedly held at 9.7% in March. Moreover, Aluminum Corporation of China climbed 4.19% on the back of higher metal prices, while China Overseas Land & Investment rose 2.17% after publicizing that property sales in February added 52%.

S&P/ASX 200 Index           4,807.90

Shares in Australia advanced for a seventh straight session on Monday, leading the S&P/ASX 200 to increase 40.70 points (0.85%) and close at 4,807.90 as all ten components pushed higher on day. Shares of BHP Billiton climbed 2.38% as copper futures rose 1.2%, while Woodside Petroleum surged 1.64% as oil surged to nearly an eight-week high on Friday. At the same time, Linc Energy leapt 3.58% amid CEO Peter Bond stating that investor confidence in the coal market has “come back over the last few weeks and months,” while Arrow Energy jumped 46.84% after Royal Dutch Shell and PetroChina made a bid for the firm.

Notable Asian Session Event Risk / Economic Releases