Better-than-expected China July HSBC flash manufacturing index, lower financing costs, loosening curbs on property policies, and faster-than-expected industrial firms growth in June reinforced bets that the world's second-largest economy has turned a corner.
However, gain on the upside capped as many traders were sitting on the sidelines on caution ahead of lot of data coming out from the US later this week. U.S. GDP data were due for release on Wednesday, along with the outcome of the Federal Reserve meeting. The market was also awaiting U.S. wages data on Thursday, and employment and manufacturing data on Friday.
Among Asian bourses
Australia stocks rise to fresh three-year high
Australian stock market advanced for the first time in three consecutive sessions, closing at fresh three-year high, on the back of gain in mining, lenders and consumer goods stocks. The benchmark S&P/ASX 200 Index rose 11 points, or 0.2% to 5588.40, while the broader All Ordinaries Index jumped 10.70 points, or 0.19%, to 5580.60.
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Shares of retailers and consumer goods producers climbed the most in Sydney as a weekly gauge of shopper confidence indicated the shock of the Federal budget has passed. The ANZ-Roy Morgan consumer confidence survey lifted 2.4%, back to its long run average of 2.7%. Woolworths lifted 1% to A$36.22, while Wesfarmers, owner of Coles, gained 0.8% to A$43.55. Aristocrat added 0.5% to A$5.72, Harvey Norman 1% to A$3.10 and JB-Hi-Fi 0.8% to A$19.47.
Shares of material & resources companies advanced, after China reported stronger industrial-profits data over the weekend. Rio Tinto added 0.6% to $65.75 and Fortescue Metals Group gained 2.3% to A$4.86 as the spot price for iron ore, delivered in China, rose 0.8 to $US94.30 a tonne. Resources giant BHP Billiton eased 0.1% to A$39.06 as analysts mulled its plans for the Olympic Dam project. Paladin Energy sank 3.7% to A$0.39 as J.P. Morgan cut its forecast for uranium spot prices.
QBE Insurance Group shares stumbled 11.1% to A$10.57 after warning of a surprise profit downgrade due to its Latin American operations. the insurer said its net income will drop to around A$390 million for the six months ended June 30 from A$477 million a year earlier. The insurer boosted its Latin America claims reserve by $170 million due in part to increased workers' compensation claims in Argentina.
Nikkei closes at six-month high
Japan share market advanced to a fresh six-month high, on the back of yen depreciation against greenback and better than expected domestic economic data. The benchmark Nikkei 225 index added 0.57%, or 88.67 points, to 15,618, its best finish since 22 January 2014, while the Topix index of all first-section issues rose 0.34%, or 4.34 points, to 1,290.41.
The unemployment rate edged up to 3.7% in June from 3.5% in the previous month, the internal affairs ministry said on Tuesday. It was the first increase since August 2013 when the rate rose to 4.1%. Markets had expected the June unemployment rate to remain flat from its May level of 3.5%, which was the lowest since late 1997. A separate survey from the labor ministry showed the ratio of job offers to job seekers stood at 1.10 in June, meaning there were 110 job offers for every 100 job hunters. It was the highest rate since June 1992, according to the labor ministry. The rise in both job offers and joblessness suggests more people have started seeking work as they see the labor market improving, leading them to be counted as job-seekers, which pushes up the unemployment rate.
The internal affairs ministry also said household spending fell 3% year-on-year in June. The fall was smaller than drops of 8% in May and 4.6% in April, just after the nation's sales tax was hiked for the first time in 17 years. The tax was lifted to 8%t from 5% on April 1 in a bid to help shrink Japan's mammoth national debt, one of the heaviest burdens among wealthy nations.
Nissan gained 1.9% to 1020 yen after the carmaker's earnings beat estimates on higher sales in China. The automaker said profit rose 37% to 112.1 billion yen ($1.1 billion) in the April-June quarter, as strong demand in China and other key overseas markets offset weaker sales at home. Nissan left its forecast unchanged, projecting a 405 billion yen net profit and sales of 10.79 trillion yen in the year to March 2015.
Nomura Holdings Inc. sank 0.7% to 666.1 yen after Italy accused Japan's largest broker of defrauding the region of Sicily with complex securities products in the years leading up to the global financial crisis. Police in Italy seized 104 million euros ($140 million) in property and cash as part of a probe into allegations the brokerage carried out derivatives trades from 2000 to 2006 that cost the Mediterranean island about 175 million euros.
Shanghai Composite rises to 8-month high
Mainland China market advanced for sixth day in row, sending the benchmark Shanghai Composite 0.24% higher to 2183.19, the highest closing level since 13 December 2013, when it finished at 2196.07. Turnover declined to 159.28 billion yuan from yesterday's 180.41 billion yuan.
Better-than-expected China July HSBC flash manufacturing index, lower financing costs, loosening curbs on property policies, 18% surge in industrial profits in June and the coming investment connection between the Shanghai and Hong Kong stock markets were cited as factors behind the rally.
China National Software & Service Co. surged 5.3% as a measure of technology companies climbed the most among industry groups. Microsoft Corp. said it's being probed by regulators in China.
Bank of Communications Co. advanced to the highest level in 10 months after reports said over the weekend that lender plans to sell stakes to private investors under a government reform aimed at letting private capital play a bigger role in the economy.
Hang Seng climbs 0.87%
Hong Kong share market advanced for a sixth straight session, closing at highest level in more than three years, on growing bets that the world's second-largest economy has turned a corner and the approaching investment connection between the Shanghai and Hong Kong stock markets. The benchmark Hang Seng Index climbed up 211.90 points, or 0.87%, to 24640.53, the highest close since November, 2010. Turnover increased to HK$88.66 billion from yesterday's HK$85.46 billion.
The National Business Daily reported on Monday that the "Shanghai-Hong Kong Stock Connect" scheme will be formally launched at 13 October. In response to the media report, the bourse said Hong Kong stock exchange has been intensively preparing for the stock connect, but it does not have an explicit start date yet.
Hong Kong Exchanges & Clearing gained 3.5% to HK$174.90 after brokerage houses upgrade its rating on city's sole exchange operator after the starting date of the equity link with Shanghai was reported. Goldman Sachs Group Inc. raised its target price on the stock to HK$188 from HK$167, citing prospects for increased revenue at the bourse operator as China implements market reforms. Deutsche Bank raised its target price on the bourse to HK$202 from HK$143, and Bank of America Corp. boosted its projection to HK$185 from HK$150.
Mainland developer listed in Hong Kong advanced the most amid optimism for looser home-purchase policies after two more Chinese cities eased restrictions on home purchases. Hangzhou announced partial relaxation of its home purchase restriction. China Overseas Land & Investment, the largest mainland developer listed in Hong Kong, rose 2% to HK$23.15 and China Resources Land climbed 1.1% to HK$17.38.
Hong Kong builders also climbed, with New World Development Co gaining 3.3% to HK$9.54 and Sino Land Co advancing 2.8% to HK$13.40 after Morgan Stanley upgraded the shares after Morgan Stanley issued a research report on property, elaborating its bullish view. Sun Hung Kai Properties, Hong Kong's second-largest developer, jumped 4.4% to HK$112.30.
Elsewhere in the Asia Pacific region-- New Zealand's NZX50 fell 0.42% to 5165.56. South Korea's KOSPI index added 0.64% to 2061.97. Taiwan's Taiex index sank 0.3% to 9391.88. Shares market of Indonesia, India and Malaysia were closed for public holidays.
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