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Asia stocks up on U.S. recovery hopes; Nikkei hits 33-month high

Published 02/04/2013, 02:41 AM
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Investing.com - Asian stock markets were mostly higher during late Asian trade on Monday, as indications the U.S economy is gaining momentum boosted appetite for riskier assets.

During late Asian trade, Hong Kong's Hang Seng Index eased up 0.1%, Australia’s ASX/200 Index ended down 0.2%, while Japan’s Nikkei 225 Index closed up 0.6%.

U.S. equities rallied to the highest level since 2007 on Friday after data showed that the economy added 157,000 jobs in January, while the nonfarm payrolls figures for November and December were revised sharply higher to 247,000 and 196,000 respectively.

Sentiment strengthened further after a report showed that U.S. manufacturing activity improved to a nine-month high in January while consumer sentiment unexpectedly improved in January.

Indications that the euro zone’s sovereign debt crisis has turned a corner have also helped boost appetite for equities and riskier assets in recent weeks.

In Tokyo, the Nikkei rose to hit a fresh 33-month top, as continuing weakness in the yen boosted exporters higher. The greenback traded at 92.70 against the yen, hovering close to the lowest level since May 2010.  

The Nikkei has rallied almost 27% since mid-November, when current Prime Minister Shinzo Abe began calling for more aggressive monetary easing from the Bank of Japan.

Japanese exporters have been amongst the most notable gainers, as a weaker yen increases the value of overseas income at Japanese companies when repatriated, boosting the outlook for export earnings.

Shares in television and home appliance maker Panasonic surged 16.9% after reporting an unexpected profit of JPY61 billion in the three months ended December 31, due to a weaker yen and aggressive cost-cutting measures.

Struggling television maker Sharp saw shares jump 5.5% after the firm announced last Friday a narrower quarterly net loss for its third-quarter.

Sony saw shares rally 7.5% as investors positioned themselves in the stock amid optimism ahead of its quarterly earnings report on Thursday.

Elsewhere, in Hong Kong, the Hang Seng was little changed in choppy trade as investors were hesitnant to extend a recent rally that took the index to the the highest level since May 2011.

With the approaching Chinese New Year holiday, during which the Chinese market will be closed for seven days, investors are trying to stay out of the market.

Meanwhile, in Australia, the benchmark ASX/200 Index turned lower as some profit-taking set in after the index rose to a fresh 21-month high early in the session.

Losses were limited as sentiment continued to be supported by expectations the Reserve Bank of Australia will cut interest rates at its upcoming policy-setting meeting on Tuesday.

Looking ahead, European stock market futures pointed to a steady open, as Friday’s upbeat euro zone and U.S. data continued to underpin demand for higher yielding assets.

The EURO STOXX 50 futures pointed to a loss of 0.1% at the open, France’s CAC 40 futures were flat, London’s FTSE 100 futures were little changed, while Germany's DAX futures pointed to a flat open.  

Spain was to produce official data on employment later Monday, while the U.S. was to release official data on factory orders.

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