MW: Upbeat in Asia; Ping An, Santos and Honda rise
South Korea, Hong Kong shares ride sudden wave of investor optimism
HONG KONG (MarketWatch) -- Asian stocks soared Monday, with Hong Kong's benchmark stock index up more than 8% and Japan's top index up more than 5%, as investors rallied around signs that governments will roll out more stimulus measures in coming weeks to ward off economic disaster.
Drugmakers were among the standouts in Tokyo while energy group Santos Ltd. led gains in the commodity sector in Sydney on reports it may be the target of a takeover attempt.
President-elect Barack Obama "has been making some strong statements about the economic-stimulus package," said Yoji Takeda, a fund manager with RBC Investment Management Asia. He added that investors were also cheered by lower trading volumes in Tokyo, an indicator that forced selling by hedge funds and other institutional investors may have run its course.
In a nationwide radio address Saturday, President-elect Barack Obama sketched out the biggest government-funded work program seen since the building of the interstate highway system in the 1950s.
Brokers conceded surprise at the size of the surge, attributing gains to sudden optimism that China would take further steps to pump up its own economy.
"Everybody is expecting the Chinese government will unveil more measures to boost the economy," said Fancis Lun, general manager of Fulbright Securities in Hon Kong. He added that the sudden change in sentiment was somewhat mystifying in light of grim U.S. employment data released Friday.
Property stocks were among standouts in Hong Kong, with the Hang Seng Index closing up 8.7% at 15,044, the highest level in almost two months. Shares of mainland-geared China Overseas Land & Investment rose 14.8%.
Shares of Santos jumped 9% following a Monday report in the South China Morning Post saying that China National Petroleum Corp. is considering pairing with a foreign oil company in making a bid for the Australian oil and gas producer. The report did not identify sources.
National Australia Bank led the financial sector higher in Sydney, its shares rising 5.8%.
Indian stocks advanced, led by banks and car makers, after the government announced during the weekend plans for an extra 200 billion rupees ($4.1 billion) in stimulus spending for the fiscal year ending in March. The Reserve Bank of India also cut interest rates by 1 percentage point to 6.5%, the third rate cut since October. See full story.
Technology stocks were among the top performers in South Korea, where the Kospi Composite index rose 7.5%, led higher by Samsung Electronics Co., which rose 8.7%.
The U.S. dollar was traded at 93.27 yen late in Tokyo, down from its Friday close of 93.34 yen in New York.
In other regional action, Japan's Nikkei 225 rallied 5.2% to close at 8,329.05.
Japan's current-account surplus contracted 56.5% to 960.5 billion yen ($10.35 billion) in October from the year-earlier month. That's the eighth straight monthly decline, as both exports and imports softened, according to data released Monday by the Ministry of Finance.
Other big advancers in Hong Kong included financials such as Ping An Insurance, shares of which added 12%. Hong Kong Exchanges & Clearing , operator of the local stock and futures markets, saw its shares leap 16.3% after a Hong Kong government official said a long-delayed program to enable Chinese residents to invest in Hong Kong-listed, known as "through train", remains alive, although no details were given the reform would be approved anytime soon.
Tokyo gainers included pharmaceutical groups Eisai Co. and Chugai Pharmaceutical Co. , whose shares rose 8.2% and 5.2%.
Stock markets in the U.S. finished higher Friday, as investors shrugged off weaker employment data for November. The Dow Jones Industrial Average finished up 3.1% to 8,635.42.
New York lost ground initially, before rallying, following the release of data showing U.S. nonfarm payrolls fell by a bigger-than-expected 533,000 last month, the worst such tally in 34 years. The unemployment rate surged to 6.7%, its highest since October 1993.
"Most equity-market players continue to misread the nature and depth of the crisis upon us; no economic stimulus program as such will fix banks' balance sheets and permit credit to start flowing again," Uwe Parpart, chief economist and strategist for Asia with Cantor Fitzgerald in Hong Kong, wrote in a note Monday.
