Investment rationale for risker assets underpinned across the Asian market on gaining confidence over US economy after better-than-expected April home sales report saw U.S. stocks gain for a third day on Friday, with the S&P 500 closing above 1,900 points for the first time ever.
The Commerce Department reported that new home sales rose 6.4% in April to a seasonally adjusted 433,000 after falling in the previous two months. Demand for new homes has been one of the last missing pieces as the U.S. economy, the world's largest, recovers from the global financial crisis.
Regional market received further support from remarks by Chinese Premier Li Keqiang that suggested Beijing is preparing further mini-stimulus measures to support the economy.
The Chinese Premier Li Keqiang said on Friday that China's economy still faces relatively big downward pressures and timely policy fine-tuning is needed. We should use appropriate policy tools and pre-emptive fine-tuning in a timely and appropriate manner to help resolve financing strains for the real economy, especially small firms' difficulties in financing and high borrowing costs, he said. Such policy fine-tuning should help maintain reasonable growth in money supply and bank credit, he said.
The Chinese government has been using targeted policy measures, including accelerated spending on railways and affordable housing and tax cuts for smaller firms, to underpin growth in the world's second-largest economy.
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Meanwhile, investors sentiments were also aided by calm weekend Ukrainian elections. Investors were also hoping for easing geopolitical risks after exit polls in Ukraine gave billionaire Petro Poroshenko more than 55% of the vote in the presidential election.
Among Asian bourses, Australian share market extended winning streak for fifth session in row, following gains on offshore markets on Friday, with lenders, mining and energy players leading advances. The benchmark S&P/ASX200 and the broader All Ordinaries each rose by 0.4% to 5512.80 and 5490.40, respectively.
Financials stocks closed up, with two out of top four lenders hit new record high, as investors look for high yielding assets. Commonwealth Bank of Australia added 0.3% to A$81.56 and ANZ Banking Group 0.2% to A$33.67, while National Australia Bank shed 0.15% to A$33.52 and Westpac Banking Corp 0.1% to A$34.16.
Materials & resources stocks closed up. Fortescue Metals rose 1.1% to A$4.56, Rio Tinto 0.7% to A$60.95 and BHP Billiton 0.7% to A$0.7% to 37.91 yuan.
SAI Global (SAI) was up 17% to A$5.01 as applied information company mulls over a A$1.1 billion takeover bid from private equity group Pacific Equity Partners. SAI also let go Chief Executive Stephen Proges after only four month in the top job, saying there were fundamental differences of opinion between him and the board.
Lynas Corp (LYC) rose 15.4% to A$0.15 as it completed its share purchase program. Lynas announced earlier this month it intended to raise a minimum of A$30 million through a share purchase plan to boost working capital at its Malaysian materials plant.
Qantas (QAN) rose 2.3% to A$1.36, on speculation about end of potential domestic price war with rival Virgin Australia (VAH) after QAN scrapping plans to add extra seats during the busy July-September travel period. VAH was steady at A$0.42.
In Japan, Japanese share market advanced for third consecutive session, thanks to positive finish of Wall Street Friday and yen depreciation against the greenback. The benchmark Nikkei 225 index added 0.97% to 14602.52, while the Topix index of all first-section shares climbed 1.21% to 1194.69.
But market participation levels were relatively light, totalling 1.74 billion shares traded on the first section of the Tokyo Stock Exchange worth of around 1.53 trillion yen, as tonight's U.S. Memorial Day holiday and the U.K.'s banking holiday dissuaded many overseas investors from participating.
Inflation-sensitive sectors benefited most from the buying, including brokerages, consumer lenders, and real estate developers. The four most actively traded stocks were from these groups, with Nomura Holdings up 2.3%, Mizuho Financial Group up 2.1%, non-bank lender Aiful Corp. rising 6.0%, and J-REIT Kenedix gaining 4.7%.
Shinsei Bank rose 0.5% on news that it has been short-listed for Standard Chartered's Hong Kong consumer finance unit, alongside the Carlyle Group.
In China, Mainland China share market finished higher on speculation the government will take further steps to prevent the economy from missing its growth target for this year after Premier Li's comments signal looser monetary policy. The benchmark Shanghai Composite ended 6.91 points higher at 2041.48, on turnover of 59.84 billion yuan.
Shares of automakers and airline companies surged, on news that Beijing will increase subsidies to domestic companies and as President Xi Jinping urged development of new energy vehicles and said the nation should invest more to develop airliners. SAIC Motor Corp, China's largest carmaker, gained 0.8% to 14.79 yuan. BYD Co., the automaker part-owned by Warren Buffett's Berkshire Hathaway Inc., jumped 10% to 46.38 yuan in Shenzhen. Avic Aircraft Co increased 3.9% to 9.14 yuan while Jiangxi Hongdu Aviation Industry Co rose 1.5% to 15.94 yuan.
In Hong Kong, the HK market ended slight lower in quiet trade, despite the positive cues from Wall Street Friday and Mainland China market today. The benchmark Hang Seng Index was down 2.68 points to 22963.18. Market turnover reduced to HK$39.200 billion, a fresh year to date low, as tonight's U.S. Memorial Day holiday and the U.K.'s banking holiday dissuaded many overseas investors from participating.
China Resources group were mixed. China Resources (00291) slid 4% to HK$22.95. But CR Power (00836) gained 2% to HK$20.9, making themselves the top blue-chip lower and winner respectively.
Shares of China Telcom companies listed in the Hong Kong closed weaker. China Mobile (00941) was a tick lower at HK$77.2. China Unicom (00762) fell 1.04% to HK$11.44.
Shares of casino stocks declined, with Galaxy Ent (00027)falling 0.24% to HK$61.9, while Sands China (01928) softened 0.8% to HK$58.75.
Oil majors met profit-taking selling today as SASAC lowered profit targets for the central enterprises from 10% in 2013 to 5% by 2014. Sinopec (00386) and CNOOC (00883) slipped 1% and 0.44% to HK$7.02 and HK$13.56. PetroChina (00857) and Kunlun Energy (00135) inched down 0.63% to HK$9.39 and HK$12.62.
BYD (01211) was up 0.36% to HK$41.3 after hitting an intra-day low of HK$37.5. The company earlier announced a placement at 15% discount, which some research houses believe is beneficial to the company's long-term prospects.
In India, key benchmark indices closed marginal higher after trimming sharp intraday gain, due to emergence of profit-booking in recent out-performers such as realty and power stocks by funds and other participants.
The BSE Sensex ended the session marginally up by 23.53 points at 24,716.88. The Sensex had touched an intra-day high of 25175.22 at opening trade ahead of the swearing-in of Narendra Modi as the 15th Prime Minister of India this evening.
Similarly, 50-share NSE index Nifty, which had rallied over 135 points during the session to regain the 7,500 mark, succumbed to profit-booking and ended down by 5.9 points at 7,361.20. It climbed to an intra-day high of 7,504.
Among BSE sectoral indices, realty index fell the most by 5.22%, followed by power 2.94%, consumer durables 2.00% and oil & gas 1.55%. On the other hand, auto, IT and TECk indices remained investors' favourite and were up 1.47%, 1.46% and 0.81%, respectively.
Major losers, which dragged the Sensex down were BHEL, Tata Power, GAIL, Hindalco and NTPC, while the major gainers were M&M, SSLT, Wipro, Tata Motors and L&T.
Lakshmi Machine Works advanced 3.57% after net profit jumped 88.4% to Rs 53.70 crore on 27.5% growth in total income to Rs 679.34 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Friday, 23 May 2014. On a consolidated basis, Lakshmi Machine Works (LMW)'s net profit surged 45.9% to Rs 189.06 crore on 17% growth in total income to Rs 2448.41 crore in the year ended 31 March 2014 over the year ended 31 March 2013.
Lanco Infratech fell by maximum permissible 10% lower circuit at Rs 13.45 on BSE after the company declared weak result for Q4 and year ended 31 March 2014 after market hours on Friday, 23 May 2014. On consolidated basis, Lanco Infratech reported a net loss of Rs 584.29 crore in Q4 March 2014, higher than net loss of Rs 31.59 crore in Q4 March 2013. Net sales declined 24% to Rs 2803.39 crore in Q4 March 2014 over Q4 March 2013.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index fell 0.34%. South Korea's KOSPI index was up 0.31%. New Zealand's NZX50 added 0.04%. Singapore's Straits Times index rose 0.15%. Indonesia's Jakarta Composite Index fell 0.18%. Malaysia's KLSE Composite declined 0.34%.
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