MW: Asian markets rally, paced by commodity shares, banks
By V. Phani Kumar, Shri Navaratnam & Wei-Zhe Tan
HONG KONG (MarketWatch) -- Asian markets rallied strongly Monday, with resource sector stocks pacing a broad-based advance on the back of higher commodity prices and Australia's Arrow Energy surging after receiving a takeover bid.
"The bulls are back in business," said DMG technical analyst James Lim in Singapore. "The consolidation period is now over and the trend has turned positive."
Japan's Nikkei Stock Average of 225 companies ended up 2.1% at 10,585.92, while Australia's S&P/ASX 200 was up 0.9%, South Korea's Kospi gained 1.6%, Hong Kong's Hang Seng Index advanced 2%, China's Shanghai Composite climbed 0.7% and Taiwan's Taiex was 1.3% higher.
In afternoon trade, India's Sensex added 0.7%, while Singapore's Straits Times Index rose 1.6%.
In Sydney, shares of Arrow Energy (AU:AOE 5.11, +1.63, +46.84%) (ARWEF 3.05, -0.50, -14.08%) soared 46.8% to finish at 5.11 Australian dollars ($4.65) after Royal Dutch Shell PLC (RDS.A 57.06, +1.00, +1.78%) (UK:RDSA 1,872, -1.50, -0.08%) and PetroChina Co. (PTR 117.05, +3.44, +3.03%) (HK:857 9.18, +0.25, +2.80%) offered to pay around A$3.26 billion, or A$4.45 a share in cash for the company.
The offer represented a 28% premium over Arrow's closing price of A$3.48 on Friday. The takeover bid also spurred buying in other coal seam stocks such as Oil Search, which jumped 6.3%. PetroChina shares gained 2.8% in Hong Kong and 0.4% in Shanghai.
The session marked the seventh consecutive day of gains for the Australian market.
Several other commodity stocks also ended up, riding the back of higher commodity prices.
BHP Billiton (BHP 79.18, +2.82, +3.69%) (AU:BHP 43.59, +1.01, +2.37%) rose 2.4% and Rio Tinto (RTP 226.27, +8.08, +3.70%) (AU:RIO 76.94, +1.93, +2.57%) added 2.6%, with BHP also helped by news that Japan's major steelmakers have agreed to a 55% price hike for supplies during the April-June quarter.
Korea Zinc Co. rose 2.5%, Tokyo-listed Pacific Metals Co. (JP:5541 699.00, +9.00, +1.30%) added 2.7% and Inpex Corp. (JP:1605 650,000, +4,000, +0.62%) added 1.1%, and Sterlite Industries India (SLT 18.01, +0.36, +2.04%) advanced 0.9% in afternoon trading.
Yanzhou Coal Mining Co. (YZC 21.97, +0.52, +2.42%) (HK:1171 17.26, +0.56, +3.35%) added 3.4%, while Aluminum Corp. of China, or Chalco (ACH 26.14, +1.22, +4.90%) (HK:2600 8.20, +0.33, +4.19%) gained 4.2% in Hong Kong; in Shanghai, the stocks rose 0.8% and 0.4%, respectively.
"Mining firms are up on higher oil prices, and their earnings prospects look good," said Zhang Gang from Central China Securities.
In Tokyo, shares advanced as sentiment improved on better-than-expected U.S. jobs data and the yen's recent weakness. Shinichiro Matsushita, market analyst at Daiwa Securities, said expectations the Bank of Japan will further ease monetary policy also continued to support the market.
Sony Corp. (SNE 36.34, +1.30, +3.71%) (JP:6758 3,205, +105.00, +3.39%) climbed 2.8% and Sharp Corp. (SHCA.Y 11.45, +0.09, +0.79%) (JP:6753 1,027, +19.00, +1.88%) jumped 3.8%, while Toyota Motor Corp. (TM 76.94, +1.52, +2.02%) (JP:7203 3,395, +20.00, +0.59%) rose 3.5% and Nissan Motor Co. (NSAN.Y 15.85, +0.20, +1.28%) (JP:7201 700.00, +6.00, +0.86%) surged 4.7%.
Panasonic Corp. (PC 14.34, +0.32, +2.28%) (PNSW.Y 121.65, +2.65, +2.23%) rose 2.8%, helped by the weaker yen and on news it will partner American electronics retailer Best Buy to market its three-dimensional image television sets in the U.S.
Technology stocks gained in Taipei after Apple announced it would begin taking preorders for its iPad tablet from U.S. customers on its website from March 12. Shares of Wintek Corp. jumped by the day's 7% limit, while Foxconn Technology (FXTC.F 0.00, 0.00, 0.00%) added 2.6%.
Chinese banking and property stocks broadly advanced in Hong Kong as well as Shanghai on hopes Beijing will retain its moderately loose policy stance. Bank of Communications (HK:3328 8.63, +0.17, +2.01%) gained 2.5% and China Citic Bank Corp. (HK:998 5.82, +0.13, +2.28%) added 2.3%, while Beijing North Star Co. (HK:588 2.49, +0.06, +2.47%) (BEIJF 0.33, +0.01, +1.56%) rose 2.5% in Hong Kong; in Shanghai, the stocks rose 1%, 0.9% and 0.6%, respectively.
"We are optimistic the favorable scenario for the stock markets will continue to attract increased participants, namely improving economic performance against the backdrop of tame monetary control (for both China and Hong Kong)," added Taifook Securities in a note.
Elsewhere in Asia, Philippine shares gained 0.8% and New Zealand's NZX 50 finished 0.3% higher, with Indonesian stocks gaining 1.5% and Thailand's SET Index rising 0.1% in afternoon trading.
In foreign exchange markets, the euro continued to attract buyers following the improved sentiment around Greece and the U.S. economy. On Friday, German Chancellor Angela Merkel said the Greek government had not asked Germany for aid but that Germany stood in solidarity with Greece, indicating that the euro zone had faith in Athens' substantial budget-cutting plan. Traders say the receding concerns around Greece should be supportive for the euro.
The euro was fetching $1.3666 from $1.3620 in late New York trade Friday, and 123.32 yen from 123.04 yen. The U.S. dollar was buying 90.23 yen, compared with 90.33 yen.
"Looking ahead, with risk aversion lifting and confidence about the global recovery improving, we suspect further downward pressure on the U.S. dollar and the yen may be in store this week. While the Greek crisis is by no means over, it does appear we are past the worst," said Mike Jones, currency strategist at the Bank of New Zealand.
Lead March Japanese government bond futures finished lower. The contract fell 0.07 to 140.12 points, while the 10-year cash JGB yield rose one basis point to 1.315%.
Spot gold was at $1,137, up $2.60 from the New York close Friday, while Nymex crude-oil futures for April delivery climbed 66 cents to $82.16 per barrel on Globex.
