Asian markets advanced Monday after China removed a floor on banks’ lending rates and Japan’s ruling government regained control of the parliament’s upper house, raising hopes for further reforms in both economies.
Japan’s Nikkei 225 took on 68.13 points, or 0.5%, to 14,659.04.
Hong Kong’s Hang Seng Index accumulated 54.08 points, or 0.3%, to 21,416.50
The performance in Tokyo came after the ruling Liberal Democratic Party’s coalition easily won a majority of the 121 seats contested in the upper house elections over the weekend. The victory gave Prime Minister Shinzo Abe’s LDP control over both houses, consolidating its political power.
Telecommunication and insurance shares advanced, although a strengthened yen weighed on some exporters.
Shares of Softbank Corp. climbed 0.9%, Nippon Telegraph & Telephone Corp. gained 1.3%, and MS&AD Insurance Group Holdings Inc. rose 1%.
On the downside, Nissan Motor Corp. eased 0.7%, Mitsubishi Heavy Industries Ltd. retreated 4.1%, and Renesas Electronics Corp. dropped 3.4%, as the U.S. dollar fell to around the ¥100-level.
Elsewhere, Commonwealth Bank of Australia gained 0.6%, and Macquarie Group Ltd. rose 3.3%, while gold miner Newcrest Mining Ltd. jumped 7.5%.
CHINA
Chinese shares turned volatile, meanwhile, as analysts said the People’s Bank of China’s decision late Friday to abandon a floor on the rates bank could charge on their loans marked a structural reform, but one that wouldn’t significantly affect bank earnings nor provide help to the economy.
The Shanghai Shenzhen CSI 300 recaptured 11.71 points, or 0.5%, to 2,202.19
China currently caps the interest rates that banks pay on deposits, a factor that often pushes savers toward riskier investments in search of higher returns.
Credit ratings agency Moody’s Investors Service said that while the removal of the lending rate marked an important step in China’s financial reforms, removal of the lending rate floor was a credit negative for banks.
In Monday trade, shares of China Construction Bank Corp. lost 0.2%, and those of Industrial & Commercial Bank of China Ltd. shed 0.5% in Shanghai.
Shares of metals companies advanced after gold and copper prices rose Friday in the U.S. Jiangxi Copper Co. climbed 2% and Zijin Mining Group Co. added 2.5% in Shanghai; in Hong Kong, Zhaojin Mining Industry Co. rose 4.5% and China Molybdenum Co. advanced 1.1%.
In other markets;
Markets in Singapore had the day off
Taiwan’s Taiex Index recovered 43.42 points, or 0.5%, to 8,105.45
Korea’s Kospi Index regained 8.94 points, or 0.5%, to 1,880.35
In New Zealand, the Exchange 50 Gross Index tacked on 15.74 points, or 0.4%, to 4,554.04
In Australia, the S&P/ASX 200 moved higher by 29.77 points, or 0.6%, to 5,001.86
