Japanese stocks on Monday jumped to their highest level in more than five years, boosted by an improved profit outlook and further yen weakness after the Group of Seven major economies refrained from criticizing Tokyo’s easing policies.
The Nikkei 225 advanced 174.67 points, or 1.2%, to end Monday at 14,782.21— the benchmark’s highest finish since December 2007 — after having spiked 6.7% last week.
In Hong Kong, the Hang Seng Index tumbled 331.41 points, or 1.4%, to 22,989.81
The gains in Tokyo came after leaders at a G-7 meeting offered no criticism of Japan’s monetary policies that have helped weaken the yen sharply in recent months. On Monday, the U.S. dollar was trading close to the ¥102 level, further boosting shares of Japanese exporters.
Hopes for strong earnings also provided a tailwind, after the Nikkei newspaper reported over the weekend that listed non-financial companies were on track to post a 20% growth in pretax profits for the current financial year ending March 31, 2014.
Shares of Panasonic Corp. soared 7.6%, and Nissan Motor Co. jumped 4.5%, after each issued strong annual profit forecasts.
Nippon Steel & Sumitomo Metal Corp. added 0.8% after it announced plans to cut costs, although the steel maker didn’t provide a profit forecast.
Sharp Corp. surged 12.4% after the Nikkei newspaper reported it planned to downsize its European operations.
In addition to extending its gains above the ¥100 level, the greenback also rose against other major currencies, with the euro dropping under the $1.30 U.S.-handle, while the Australian dollar traded close to parity.
One sources report that the U.S. Federal Reserve may wind down its quantitative easing — a key tailwind behind the global markets’ rally in recent months — also weighed on sentiment.
Gold miners were hit after the precious metal’s futures dropped more than 2% on Friday.
In Sydney, shares of gold miners Newcrest Mining Ltd. lost 3.8%, and Perseus Mining Ltd. slumped 7%.
Elsewhere in the resource sector, BHP Billiton Ltd. was off 0.6%, and Rio Tinto Ltd. gave up 1.5% in Sydney.
Casino operator Galaxy Entertainment Group Ltd. rose 1.6% on reports it will replace Esprit Holdings Ltd. as a Hang Seng Index constituent next month. Esprit shares overcame early declines to rise 0.6%.
CHINA
Stocks in Shanghai finished lower after China’s industrial production rose 9.3% in April from the prior-year month and retail sales during the month improved 12.8%, with growth in both data points accelerating from the rate seen in March.
In Shanghai, the CSI 300 Index ditched 10.07 points, or 0.4%, to 2,530.77
Stock in Zijin Mining Group Co. lost 1% in Shanghai and 2.6% in Hong Kong.
Shares of energy producer Cnooc Ltd tumbled 2.4% in Hong Kong, while PetroChina Co. gave up 0.6% and Jiangxi Copper Co. lost 1.4% in Shanghai.
Shares of mainland Chinese banks dropped after central-bank data released Friday showed they cut back on lending in April from levels seen in March.
Bank of Communications Co. fell 1.4%, and China Construction Bank Corp. dropped 2.4% in Hong Kong; their Shanghai-listed shares fell 1.3% and 0.6%, respectively.
Shares of Ping An Insurance Group Co. slid 4.2% in Hong Kong and 2.2% in Shanghai after China’s securities regulator banned its securities unit from underwriting new stock offers for three months, citing negligence as the cause.
In other markets;
Singapore’s Straits Times Index dipped 14.81 points, or 0.4%, to 3,428.96
Taiwan’s Taiex Index let go of 31.94 points, or 0.4%, to 8,248.96
Korea’s Kospi Index inched forward 3.95 points, or 0.2%, to 1,948.70
The New Zealand Exchange 50 Gross Index advanced 18.86 points, or 0.4%, to 4,671.64
Australia’s S&P/ASX added 4.25 points, or 0.1%, to 5,210.34
