Hopes for strong Asian earnings and looser US monetary policy pushed Asian markets to multi-month highs on Monday. Banks and commodity stocks led indices, as they continued last week’s gains, ahead of the Fed’s rate decision on Tuesday. The Bombay Sensex reached a new 30-month high: up around 0.8 per cent in late trading to 18,276.93. Hero Honda was up around 1.7 per cent, with domestic demand for automobiles expected to remain robust; Tata Consultancy hit record levels, rising around 1.7 per cent before tomorrow’s earnings figures. “With a little support from the world market, the Sensex may reach 21,000 by March,” D.K. Aggarwal of SMC Wealth Management told Bloomberg. The Shanghai Composite rose 0.5 per cent to a two-month peak of 2,672.53, with cement companies performing well. Agricultural companies also gained, on the back of higher food prices caused by China’s worst floods in ten years. The Shenzhen index was up 1.3 per cent to a four-month high. The Hang Seng was up 0.6 per cent to 21,801.59, a three-month peak. China Mobile was up 1.5 per cent, although HSBC Holdings fell 0.3 per cent, paring back rises made after last week’s solid earnings. The Taiwanese Taiex rose 0.9 per cent to a three-month high, with financials up 2.4 per cent. There was good news after the closing bell: government data shows that Taiwan’s exports grew again in July. However, Tim Schroeders of Pengana Capital in Australia warned against over-optimism about the region’s prospects: “While we’re recovering and we’d all like to see it go in a straight line upwards, the nature of the recovery is still bumpy. It’s clearly a road full of twists and turns.” In South Korea, the Kospi closed just shy of a two-year high, rising 0.4 per cent to 1,790.17. Samsung Life Insurance, whose shares have underperformed the Kospi since their debut in May, announced a 80 per cent rise in Q1 profit. The won traded up slightly against the dollar. In Indonesia, the Jakarta index gained 0.7 per cent to 3,082.62, with Astra Agro Lestari, the country’s biggest palm oil producer gaining 1.2 per cent. The Indonesian rupiah rose 0.1 per cent against the dollar to trade around 1,930. However, it remains below last week’s three-year high, with speculation that the central bank will seek to weaken the currency to protect Indonesian exporters. In Thailand, the SET index has now seen its longest gaining streak for 31 years. It rose 0.7 per cent to 875.18, completing a 13-day rally. Tech company Delta Electronics struck a six-year high, gaining 4.6 per cent after announcing Q2 earnings had tripled compared to 2009. Vietnam’s Ho Chi Minh City index was again the region’s worst performer: shedding another 2.1 per cent after Friday’s losses, to reach a new low for 2010 of 472.74. Saigon Beverages reported a $2mn loss in the first-half of the year from its canning business; its stock fell 4 per cent. Construction and bank shares were also down. In Malaysia, the FTSE Bursa was flat at 1,360.66. The ringgit hit a 27-month high and bond yields fell to 16-month lows, after Standard Chartered estimated that the Malaysian government has already raised three-quarters of its yearly target from bond auctions. Bond yields also fell in the Philippines, with investors seeing greater-than-expected liquidity ahead of a bond auction tomorrow. Fitch Ratings re-affirmed the Philippines’ BB-grade IDR rating for long-term foreign-currency lending. The agency also maintained the country’s stable outlook, citing foreign investor interest despite uncertainty over the government’s fiscal approach. The Philippine stock index was up 0.24 to 3,524.70.

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