Chinese stocks in Shanghai and Hong Kong surged more than 9% on Friday after the mainland government came to the markets' rescue, announcing plans to buy shares of listed companies and canceling a tax on securities purchases.
The key Nikkei 225 index jumped 3.8% or 431 points to finish at 11,920 while the benchmark Hang Seng index closed up 1,695.27 points or 9.61% at the day's high of 19,327.73.
On the economic front, Japan's Ministry of Finance provided weekly capital inflows of stocks and bonds. For the week ending September 13, foreign residents were net sellers of Japan stocks for the second straight week, having dumped a net 401.2 billion yen worth of stocks. However, foreigners were net purchasers of Japan bonds and notes for the week, having bought bonds worth a net 878.5 billion.
Meanwhile, the final figures for Japan's leading index came in at 91.4 in July, recovering slightly from a dip that had taken the index down to 91.3 in June, the Economic and Social Research Institute said. Economists had been expecting the final figure to match the preliminary reading of 91.6. The research institute also reported that Japan's coincident index increased to 103.5 in July from the 101.6 reported in June.
Mizuho Financial Group rose by its daily limit of 12.6%, Sumitomo Mitsui Financial Group surged 13.2%, and Mitsubishi UFJ Financial Group jumped 11.5%. Top brokerage Nomura Holdings also gained nearly 10%. Among insurers, non-life insurer Sompo Japan Insurance gained 12.0% and Tokio Marine Holdings climbed 14.3%.
Mitsui O.S.K. Lines closed limit-up 10%, Kawasaki Kisen advanced 10.5%, and Nippon Yusen closed up 9.9%. The shipping sector attracted heavy buying after the industry's benchmark Baltic Dry Index gained for the third straight day on Thursday.
Among exporters, Honda Motor climbed 5.4%, Toyota jumped 6.1%, electronics giant Sony gained 3.1%, machinery maker Komatsu surged 13.5% and Canon rose 8.1%.
The Chinese market closed sharply higher, with the key Shanghai Composite index surging 9.46%, after regulators cancelled the stamp duty on share purchases and the sovereign wealth fund announced plans to buy shares in state-owned banks. Almost all stocks rose by the daily limit. The key index closed up 179.25 points at 2,075.09, recording its biggest single-day rise since October 23, 2001. For the week, the index has lost 0.22% and it has fallen 60.56% so far this year.
According to analysts, the dramatic rebound, however, does not indicate a turnaround in the market as they anticipate that the key index will see resistence at 2,200- 2,300. On Thursday, the composite index hit a low of 1,802.33, its lowest level in about two years.
China Petroleum & Chemical or Sinopec and index heavyweight PetroChina both rose by the 10% daily limit.
Bank of China gained 10% after the lender said it has signed an agreement to acquire 20% of private bank La Compagnie Financiere Edmond de Rothschild for EUR 236.27 million. Bank of Communications jumped 10%, despite reporting that it held $70.02 million worth of bonds issued by US investment bank Lehman Brothers.
Beijing Sanyuan Foods gained 10% as the company has so far avoided being associated with the cases of contamination in powdered and fresh milk products. China's food safety regulators said they found melamine contamination in fresh milk products of major producers including Inner Mongolia Yili Industrial and Bright Dairy & Food. Trading in the shares of Yili Industrial and Bright Dairy were suspended pending announcements in connection with the melamine contamination.
Elsewhere:
Taiwan's Taiex closed up 5.8% at 5,970.
Singapore's STI closed up 5.8% at 2,559.
Malaysia's KLCI closed up 3.4% at 1,025.
India's Senex closed up 5.5% at 14,042.
Indonesia's Jakarta Composite index closed up 5.8% at 1,891.
South Korea's Kospi advanced 4.6%.
Australia's S&P/ASX 200 index climbed 4.3%.
New Zealand's NZX 50 index added 0.9%.
with files from other wire services
