Investment rationale for cyclical stocks was energized on signs that tensions over Iran's nuclear program may wane in the coming months. Iran and six world powers clinched a deal on Sunday, 24 November 2013, curbing the Iranian nuclear programme in exchange for initial sanctions relief, signalling the start of a game-changing rapprochement that could ease the risk of a wider Middle East war. Aimed at ending a long festering standoff, the interim pact between Iran and the United States, France, Germany, Britain, China and Russia won the critical endorsement of Iranian clerical Supreme Leader Ayatollah Ali Khamenei.
US President Barack Obama said the deal struck after marathon, tortuous and politically charged negotiations cut off Tehran's possible routes to a nuclear bomb. But Israel, Iran's arch-enemy, denounced the agreement as an "historic mistake". Iran's oil exports will be held to about 1 million barrels a day under sanctions that remain in force after the deal.
The six-month agreement, which offers Iran about $7 billion in relief from sanctions in exchange for curbs on its nuclear program, leaves in place banking and financial measures that have hampered its crude exports. Sanctions on sales of refined products also remain, while Iran gains access to $4.2 billion in oil revenue frozen in foreign banks, the White House said. As part of the deal, the European Union (EU) will lift a ban on insurance for tankers transporting Iranian oil, making it easier for the Persian Gulf nation's six remaining customers to take delivery. The EU will continue to prohibit crude imports from Iran.
A global deal to lift sanctions against Iran is expected to unleash a flood of oil onto world markets by next year, with crude output expected to pick up in Libya, Iraq and North America. Iran's exports have slumped by over 60% over the past two years due to sanctions.
Among Asian bourses, Japanese share market finished at a new six-month high with sentiment buoyed by a weaker yen and a nuclear deal between world powers and Iran. The benchmark Nikei225 index added 237.41 points to 15619.13, while broader Topix index rose 11.04 points to 1259.61.
Japanese yen depreciation against the greenback also supported Japanese stocks. The yen weakened against the dollar in today's trade - last quoted at Y101.79, compared with Y101.27 late Friday in New York.
Fast Retailing Co. climbed 2.5% to 37700 yen on news that the operator of the Uniqlo chain of shops is planning a secondary listing in Hong Kong in the first quarter of next year.
Tokyo Electron climbed 1.9% to 5490 yen on reports that it and more than 20 manufacturers will jointly develop technology to mass-produce a next-generation semiconductor using MRAM (magneto resistive random access memory). Micron Technology and Tokyo Electron of Japan will lead the joint project, hoping to perfect the technology within three years and start mass production as early as 2018, the paper said.
Hitachi Metals added 3.5% to 1393 yen after a Credit Suisse target price hike to 1200 yen from 1000 yen, citing sooner than expected profit recovery.
In Australia, Australian shares rose for second session in row, sending the benchmark S&P/ASX 200 index higher by 0.32% to finish at 5352.80.
Australian materials and resources went higher, with BHP Billiton gaining 0.2% at A$37.89, while Rio Tinto, second biggest miner, gained 0.2% to A$65.40. Fortescue Metals rose 0.7% to A$5.82.
Shares of Australian precious metal producers continued falling due to fall in bullion prices in the international market on Monday's session. Gold for immediate delivery lost as much as 0.5% to $1,237.45 an ounce in Asian deal today. Newcrest Mining shed 2.8% to A$8.26, Perseus Mining 5.2% to A$0.275 and Kingsgate Consolidated 1.3% to A$1.185.
The three way tie for Warrnambool Cheese and Butter Factory (WCB) continues, with WCB endorsing a sweetened takeover bid from Canadian firm Saputo. The deal values the Aussie dairy producer at A$514.9 million, or A$9.20 per share and is conditional on Saputo acquiring more than 50% of the company. WCB shares closed 2% higher at A$9.23 while former suitor Bega Cheese (BGA) fell 0.9% to A$4.67.
The Australian dollar weakened further to US$0.9148 after losing nearly 2% against the greenback last week. In addition to comments from Reserve Bank of Australia Governor Glenn Stevens that the central bank could intervene in the market to fight the currency's strength, a slowdown in the growth of Chinese manufacturing activity weighed on the Aussie.
In China, Chinese stocks declined for third session, weighing the Shanghai Composite down by 10.26 points to 2186.12. Almost all sectors eased with shares in energy producers led losses on decline in international crude oil prices. Meanwhile, defense-linked stocks rose after the government imposed a protected air zone in the East China Sea.
Shares of Chinese energy players were top loser in the SSE, with PetroChina, the nation's biggest oil company, declining 1.5% to 7.98 yuan. Shenhua, the country's largest coal producer, fell 1.3% to 16.56 yuan. China Petroleum & Chemical Corp lost 4% to 4.85 yuan after explosion at pipeline killed 55 people. The explosion occurred after oil leaked from the pipeline into Qingdao's municipal rainwater network.
Shares of defense related companies in China closed higher after the Chinese government announced an air defense identification zone in the East China Sea effective Nov. 23. China at the weekend suddenly imposed new rules on airspace over islands at the heart of a territorial dispute with Tokyo, prompting Japan and allies the United States to warn of an escalation into the unexpected
Anhui Sun-Create Electronics advanced by the 10% daily limit to 30.86 yuan. Wuhan Guide gained 10% to 18.81 yuan. China Spacesat Co added 2.5% to 18.74 yuan.
In Hong Kong, shares in city bourses finished mostly lower in narrow but volatile trade, with Hang Seng Index declining 11.83 points to finish at 23684.45, while the Hang Seng China Enterprises Index lost 61.54 points to 11387.21. The decline in Hang Seng bourse came on tracking weakness in the Mainland China bourses and on profit taking after the biggest weekly gain in two years.
Among the HK 50 blue chips, 13 stocks rose and 31 fell, with six stocks remaining steady. Hang Lung Properties softened 3% to HK$25.8, while Tencent gained 3.2% to HK$438 on a potential partnership with Sinolink Securities, making themselves the biggest blue-chip loser and winner.
China Petroleum & Chemical Corp sank 2.6% to HK$6.83 after saying operations at a refinery will be disrupted after the explosion.
Zhaojin Mining Industry Co., China's second-largest gold producer, slid 2.2% as bullion prices fell after a nuclear accord with Iran tempered demand for haven assets.
Great Wall Motor jumped 2.6% to HK$46.80 on hopes that its newly launched Harvard H8 model at the Guangzhou Auto Show will buoy earnings growth.
In India, Indian benchmark indices surged and hit fresh intraday high in mid-afternoon trade. The market sentiment was boosted by a drop in crude oil prices after the US and five other world powers agreed with Iran on Sunday, 24 November 2013, to ease part of an economic stranglehold in exchange for steps aimed at capping Iran's nuclear program and ensuring the country's Islamist government doesn't rush to develop atomic weapons. The barometer index, the S&P BSE Sensex, was up 335.57 points or 1.66%, off close to 35 points from the day's high and up about 230 points from the day's low.
NHPC rose 1.42% after the company said it will commence the buyback of shares from Friday, 29 November 2013. The company made the announcement after market hours on Friday, 22 November 2013. NHPC plans to buyback around 123 crore fully paid up equity shares of Rs 10 each at a price of Rs 19.25 per share, aggregating Rs 2368 crore from the open market. The buyback offer will close on 12 December 2013.
DIC India hit an upper circuit limit of 20% at Rs 282.80 on BSE after the company's promoter proposed a voluntary delisting offer. The company made the announcement after market hours on Friday, 22 November 2013. DIC India informed exchanges that its promoter DIC Asia Pacific has proposed to delist shares of DIC India from all the stock exchanges. The promoter is proposing to acquire the remaining 25.92 lakh equity shares, or 28.25% stake in DIC India at an indicative offer price of Rs 260 per share.
In the foreign exchange market, the Indian rupee edged higher against the dollar as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. India imports majority of its crude oil requirements. The partially convertible rupee was hovering at 62.54, compared with its close of 62.87/88 on Friday, 22 November 2013. The Reserve Bank of India on Friday, 22 November 2013, conditionally extended the deadline for banks to swap dollars raised through overseas borrowings at discounted rates, further bolstering the local currency. Indian banks now have until 31 December 2013 to avail themselves of the central bank's offer of concessional swaps for dollars raised through overseas debt, compared with the previous deadline of 30 November 2013, as long as the funds have been committed by the end of this month, the RBI said in a statement after market hours on Friday, 22 November 2013.
Elsewhere in the region, Indonesia's Jakarta Composite index rose 0.39%. South Korea's KOSPI rose 0.49%. Taiwan's Taiex index added 0.87%. Malaysia's KLSE Composite rose 0.19%. Singapore's Straits Times index added 0.25%.
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