Asian equity markets gained sharply Monday after European leaders indicated progress on resolving the euro-zone debt crisis and as data pointed to an improvement in Chinese manufacturing.
In Tokyo, the Nikkei 225 Index added 165.09 points to end the week’s first session at 8,843.98
In Hong Kong, the Hang Seng Index vaulted 746.10 points, or 4.1%, to 18,771.80
Most Asian equity markets had finished with weekly losses Friday, as caution prevailed ahead of weekend meetings to discuss moves to resolve Europe’s debt crisis.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said at a joint press conference Sunday that a broad agreement is taking shape.
Reports suggested that the EFSF could be used to provide insurance for debt holders of weaker European countries or could also serve as part of the financing for a special purpose vehicle that would buy the bonds of weaker countries.
Shares of many resource-sector companies — often viewed as a proxy for economic growth expectations — were among the best performers in Asia on Monday, helped by a gain in commodity prices.
In Sydney, BHP Billiton Ltd. rose 3.2%, Rio Tinto Ltd. gained 4.9%, Fortescue Metals Group Ltd. jumped 8.5%, and Woodside Petroleum Ltd. rose 3.6%.
Aluminum Corp. of China Ltd. advanced 6.4%, Jiangxi Copper Co. spiked 11.2%, and Cnooc Ltd. climbed 6.5% in Hong Kong.
Japanese trading houses, which are sensitive to moves in commodity prices, also saw buying, with Mitsubishi Corp. up 3.3% and Itochu Corp. rising 4%.
Likewise, banks advanced following the European assurances of a coming rescue deal, with Nomura Holdings Inc. up 2.1% in Tokyo, while in Hong Kong, Agricultural Bank of China Ltd. surged 8.1%, and Bank of China Ltd. climbed 6% in Hong Kong.
The dollar traded back above the 76-yen mark Monday after dipping to a post-World-War-II low of ¥75.76 at the end of last week. Japan’s Finance Minister Jun Azumi said Monday that the country would take action against any further "excessive" rise in the yen.
The currency pair’s return above ¥76 appeared to help some exporters, with chip maker Elpida Memory Inc. up 4%, and tire producer Bridgestone Corp. gaining 4.1%.
CHINA
Preliminary results from a monthly survey of Chinese manufacturing climbed to a five-month high of 51.1 points in October, according to a survey released by HSBC on Monday, moving back above the 50 mark that separates growth from contraction.
Shanghai’s CSI 300 index improved 68.79 points, or 2.7%, to 2,576.67
The level "confirms the strength of China’s manufacturing growth despite the lagged impact of policy tightening and early signs of slowing external demand," said Qu Hongbin, co-head of Asian economics research at HSBC.
Also among the major gainers were Chinese property plays, with China Resources Land Ltd. rising 10%, and Hang Lung Properties Ltd. up 6.8% in Hong Kong, and China Vanke Co. adding 5% on the Shenzhen bourse.
In other markets;
Markets in New Zealand had the day off
Taiwan’s Taiex Index leaped 215.79 points, or 3%, to 7,470.30
Korea’s Kospi Index picked up 59.94 points, or 3.3%, to 1,898.32
Singapore’s Straits Times Index tacked on 48.54 points, or 1.8%, to 2,760.95
Australia’s S&P/ASX 200 Index added 113.10 points, or 2.7%, to 4,255
