Japanese and mainland Chinese stocks defied a broad weakness in Asia Monday, with equities in Tokyo rising after weekend election results sparked optimism for new policies to combat deflation, while hopes for policy reforms lured buyers in Shanghai.
The Nikkei 225 Index in Japan gained 91.32 points, or 0.9%, to 9,828.88, reaching its best levels since April.
In Hong Kong, the Hang Seng index fell 92.37 points, or 0.4%, to 22,513.61
Stock markets in Hong Kong and Australia were among those that declined in the rest of Asia, as investors looked to a weak lead from Wall Street Friday amidst uncertainty related to the U.S. fiscal cliff.
Japanese stocks outperformed on the back of a weaker yen, with the dollar straddling ¥84 during the session from ¥83.51 in late North American trading on Friday. The moves came as a coalition of the Liberal Democratic Party of Japan and a junior partner took more than two-thirds of the 480 seats in elections to the lower house of the parliament Sunday.
With LDP leader Shinzo Abe expected to be named as the country’s new prime minister on Dec. 26, beating deflation in part by boosting public works spending and taking bold monetary easing steps will be the new government’s top priority, the Nikkei reported.
Weakness in the yen had prompted sharp share price gains for many Japanese exporters in the lead-up to the election. Sharp Corp. spiked 11.9%, Nissan Motor Co. climbed 1.8%, while Mazda Motor Corp. and Sony Corp. gained 1.4% each.
Resource stocks fell in Hong Kong, with Cnooc Ltd. declining 1.8% and China Petroleum & Chemical Corp. losing 1.8%.
Shares of insurance giant AIA Group Ltd. were in a trading halt at the company’s request, pending the potential sale of "significant proportion" of American International Group Inc.’s 13.69% stake in the company via a placement.
Losses in Seoul were led by auto makers. Kia Motors Corp. down 3.6% and Hyundai Motor Co. losing 2%.
In Sydney, health-care firms weighed the market, with blood products group CSL Ltd. down 1.2% and Mesoblast Ltd. off by 2.9%.
CHINA
Meanwhile, a Chinese government statement issued after a conference on economic policy over the weekend was interpreted by market analysts as broadly being in line with past policy statements, and favoring stability.
The Shanghai CSI 300 Composite Index gained 10.84 points, or 0.5%, to 2,366.70
The gains on mainland bourses came after the country’s foreign-exchange regulator raised the investment limit for sovereign-wealth funds and central banks investing in local stocks and bonds in a move to deepen the country’s capital markets.
Metal-related firms were advancing notably in mainland trading, with Jiangxi Copper Co. rising 3.5% and Aluminum Corp. of China Ltd. gaining 2%.
In other markets
In Singapore, the Straits Times Index lost 9.73 points, or 0.3%, to 3,158.70
Korea’s Kospi index subtracted 11.97 points, or 0.6%, to 1,983.07
Taiwan’s Taiex Index dipped 67.49 points, or 0.9%, to 7,631.28
New Zealand’s NZX 50 fell 12.69 points, or 0.3%, to 3,966.49
Australia’s ASX Index doffed 9.71 points, or 0.2%, to 4,573.70
