Asian stocks rose on Monday amid hopes that a massive US stimulus package would bolster the economy, while the dollar clung near a one-month high against the yen as investor risk aversion waned despite grim US data.
Hong Kong shares opened 1.5% higher, heading for a fourth day of gains and their longest winning streak in two months, while Japan’s Nikkei average climbed for a second straight day.
Wall Street rallied broadly on Friday after figures showing US job losses in January were the worst in 34 years, sparking hopes that Congress will act quickly to pass a stimulus package to help the economy. But the US administration pushed back the announcement of a keenly awaited bank rescue plan until Tuesday from Monday as it pressed lawmakers to settle their differences over the huge stimulus plan.
“Investors picked up exporters for now on short-covering, but it’s doubtful if the market will continue to gain,” said Takahiko Murai, general manager of equities at Nozomi Securities in Tokyo. “The market’s focus could shift back to the deteriorating state of the economy once it sees the US stimulus plan, which appears to be somewhat going backward, including uncertainty over the establishment of a ‘bad bank’ scheme.”
Squabbling over the US rescue plan was set to continue on Monday, when the Democratic-led Senate votes to end debate on an $827 billion rescue package so it can be passed on Tuesday. US President Barack Obama has demanded that the bill be on his desk for signing into law by next Monday.
Japan’s Nikkei stock average rose 1%, with Honda Motor Co and Toyota Motor Corp climbing despite Toyota’s forecast of a larger than expected loss on Friday since bad news had been widely anticipated.
But shares in Nomura Holdings Inc, Japan’s biggest brokerage, sank 10% to a 26-year low amid concerns that a plan to issue up to $3.3 billion in new stock to bolster its capital would dilute earnings. The MSCI index of Asia-Pacific stocks outside Japan climbed 0.9%. Hong Kong’s Hang Seng rose 1.1%.
COPPER GAINS ON CHINA HOPES
Copper surged more than 8% on Friday on hopes for an economic recovery in China, an aggressive rally that bolstered shares of global miners such as Rio Tinto Ltd,Plc, which helped lead Australian shares higher. Mitsubishi Corp and other Japanese trading firms also benefited.
But gold slipped as players took profits after a recent rally, with rising expectations that the US stimulus package was likely to steer some funds away from gold as risk appetite rises.
The dollar hit a one-month high against the yen before falling back slightly, giving little reaction to data showing Japan’s current account surplus fell 92.1% in December from a year earlier.
The US currency traded around ¥91.72 after climbing to ¥92.42 earlier on trading platform EBS, its highest since early January. The euro was at $1.2950. The Australian dollar was struggling to hold onto gains after hitting a three-week high offshore on Friday, trading at about $0.6685.
The yield on the benchmark 10-year US Treasury note fell nearly 3 basis points to 2.970% from Friday, when it briefly touched 3% for the first time since late November. The March 10-year Japanese government bond future was unchanged at 138.35.
Oil took a breather from its recent decline and steadied around $40 a barrel on Monday as hopes that swift passage of the US stimulus package outweighed demand concerns, with US crude for March delivery edging down by one cent to $40.17. (Reuters)