China's $586 billion economic stimulus package sparked a rally in Asian markets Monday, raising hopes that Beijing's efforts to boost a slowing domestic economy will support commodity prices amid fears of a prolonged recession in the developed world.
The benchmark Nikkei 225 Stock Average surged up 498.4 points or 5.8% at 9,081.43 while the benchmark Hang Seng Index closed up 501.2 points or 3.5% at 14,744.6 after opening as high as 15,033.2.
Japan's core machinery orders dropped 10.4% in the July-September quarter from the previous three months, matching the biggest plunge on record, according to data released by the Cabinet Office before the market opened for trading. However, core private-sector machinery orders, a key gauge of corporate capital spending, rose 5.5% in September from the previous month compared to analysts' forecast for a 4.9% rise.
On Sunday, China announced a $586 billion stimulus package, the biggest move so far by the world's fourth-largest economy to mitigate the effects of the global financial crisis.
Stocks gained across the board. Among exporters, Sony jumped 7.6%, Sharp gained 7.3%, Canon rose 5.2%, Honda Motor climbed 4.7%, machinery maker Komatsu surged 12.0%, and Tokyo Motor advanced 2.6%.
Mitsubishi Heavy Industries rose 6.3%, Nippon Steel climbed 6.6%, JFE Holdings soared 13.0%, and Sumitomo Metal Industries gained 10.3%.
In the banking space, Mitsubishi UFJ Financial Group gained 4.8%, Mizuho Financial Group added 2.3%, and Sumitomo Mitsui Financial Group advanced 2.4%. Top brokerage Nomura Holdings jumped 2.9%.
Oil and gas miner Inpex Holdings jumped 7.9% and Nippon Oil climbed 6.3%. Mitsubishi Corp rose 3.5% and Mitsui & Co advanced 5.1%.
Sanyo Electric plunged 6.9% after the company said Friday that it was in talks with Panasonic on a buyout deal. Panasonic edged up 0.8%.
CHINA
The Chinese stock market closed sharply higher, extending its gains for the second straight trading session, spurred by the country's 4 trillion yuan or $586 billion economic stimulus plan revealed over the weekend. The benchmark Shanghai Composite Index closed up 127.1 points or 7.3% at 1,874.8.
China said on Sunday that it would loosen credit conditions, cut taxes and embark on a massive infrastructure-spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.
On the economic front, the National Bureau of Statistics said Monday that China's producer price index, a barometer of future consumer inflation, rose at a slower annual rate of 6.6% in October.
Among banks, China Merchants Bank jumped 9.5%, Industrial and Commercial Bank of China climbed 5.8%, Industrial Bank surged 9.5%, and China CITIC Bank rose 6.0%. Elsewhere in the financial sector, brokerage Pacific Securities soared 9.2%, CITIC Securities advanced 10.0% and Changjiang Securities rocketed 9.8%. China Life Insurance added 7.8% and Ping An Insurance advanced 5.3%.
In the property sector, China Vanke gained 7.5% and Poly Real Estate Group jumped 9.9%. Market heavy weight PetroChina rose 6.8% and Sinopec surged 9.4%.
Elsewhere:
Taiwan's Taiex closed flat at 4,740.
Singapore's STI closed up 1.2% at 1,885.
Indonesia's Jakarta Composite Index closed flat at 1,340.
Malaysia's KLCI closed up 10.3 points at 904.
New Zealand's NZX 50 index climbed 1.7% to 2,837.85.
South Korea's Kospi added 1.6% to 1,147.13.
Australia's S&P/ASX 200 rose 1.4% to 4,107.80.
with files from other wire services
