Investors chose to focus on the positives of the US stronger economic data rather than the negatives, that is, that the Federal Reserve to begin bringing the curtain down on its easy money policies.
The U.S. and China are two big growth engines of the world economy, so any improvement in terms of their economies is going to reflect well globally.
Friday's closely-watched non-farm payrolls report showed the U.S. economy created 203,000 jobs in November, much more than expected. The jobless rate fell to a five-year low, while other data showed consumer confidence hit a five-month high.
In China, trade surplus widened to $33.8 billion in November, the biggest since January 2009, data from the General Administration of Customs showed on Sunday in Beijing. Chinese exports climbed 12.7% from a year earlier, following a 5.6% gain in October. Imports rose 5.3%. National Bureau of Statistics released inflation data today, showing consumer prices rose 3% in November, down from October's 3.2%, giving Beijing more room to stimulate the economy if needed. The producer-price index fell 1.4%.
Market gains were, however, limited as investors are now waiting for another raft of Chinese data due on Tuesday, including November industrial production, retail sales and fixed asset investment.
The market focus also on the Fed's upcoming meeting is expected to dominate sentiment for the days ahead as prospect that a strengthening U.S. economy could persuade the Federal Reserve to begin bringing the curtain down on its easy money policies. The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013.
Among Asian peers, Japanese financial market finished sharp higher, on the back of yen depreciation above 103-level against the greenback after positive economic data out of China and the US. The benchmark Nikkei Stocks Average climbed 350.35 points to 15650.21, while the broader Topix index rose 19.49 points to 1255.32.
Japanese yen depreciated from prior day closure against the US dollar and other major currency basket on Monday. The key reasons for Yen's weakness were the downgrade of Japanese Q3 2013 GDP estimates and Japan unexpectedly swung into a current account deficit in October. The greenback fetched 103.06 yen in afternoon Tokyo trade, up from 102.85 on Friday afternoon in New York.
Cabinet Office said on Monday that Japan's gross domestic product, or the total value of goods and services produced, grew an annualized 1.1% in the July-September period from the previous quarter. Japan expanded 0.3% QoQ in Q3 2013, as against previously estimated 0.5%. It was lower than the market's consensus of 0.4%.
Meanwhile, Japanese current account balance unexpectedly swung into deficit of 127.9 billion yen in October, as against a surplus of 153 billion yen in September, data released by the Ministry of Finance showed on Monday.
Export related stocks were sharp higher in Tokyo, bolstered by the yen weakening against the U.S. dollar and the euro. A weaker yen helps makes them more competitive overseas and inflates repatriated earnings. Auto stocks were stronger, with Mazda Motor Corp rising 3%, Nissan Motor Co 0.67% and Toyota Motor Corp 1.29%. Techs also benefited from yen weakness, with shares of Sony Corp gaining 1.31% Canon Inc jumping 1.22%.
Sumitomo Mitsui Trust Holdings Inc. added 2% in Tokyo after SMBC Nikko Securities Inc. analysts advised buying shares in the bank.
In Australia, Australian share market finished weaker, shrugging off positive economic data out of China and the US, with banks and financial shares led losses after a shock profit warning from Australia's largest insurer QBE (QBE). The All Ordinaries Index (XAO) slipped by 0.73% to finish at 5148.40.
Australian major banks and financials shares were down today, with insurance group QBE led decliners, falling 22.3% to A$12 after the company today said it would suffer an expected $US250 million loss this financial year due to weakness in its North American business. The news was driven by $600 million in goodwill write downs stemming from the North American business due increased claims as a result of weaker-than-expected US crop yields and prices. QBE expects its insurance profit margin to fall from 8% to 6%. Among top banks, Commonwealth Bank fell 0.4% to A$74.90, Australia & New Zealand Banking Group 0.8% to A$30.75, Westpac Bank 1.3% to A$31.09 and National Australia Bank 0.9% to A$33.17.
Brambles (BXB) shares declined 1.1% to A$9.28 after the logistics and pallet provider flagged a stronger first half profit, but left its FY14 profit guidance unchanged. BXB has estimated FY14 underlying profit of between US$930-965M for the year to June, a rise of 4-8%.
Two companies listed on the ASX today. Adult education group Vocation (VET) was up 7.4 on debut to A$2.03 while childcare services provider Affinity Education Group (AFJ) rose 4% to A$1.04.
In China, Mainland China share market closed mixed, as better than expected trade data largely offset by profit taking in coal miners. The Shanghai Composite rose 1.09 points to finish at 2238.20, while the CSI 300 Index fell 1.42 points to close at 2450.87.
Shares of technology companies climbed the most among 10 industry groups in China. Hangzhou HIK-Vision, which makes video-surveillance equipment, surged 4%to 22.69 yuan.
Shares of Chinese Coal companies declined on concern worsening pollution may reduce reliance on the fuel. China Shenhua, the biggest coal producer, declined 0.5%to 16.97 yuan. Guanghui Energy Co. slumped 1.8%to 9.65 yuan.
China's Yuan jumped to a record high against the US dollar on Monday, after the central bank relaxed its grip on the currency following strong trade data, suggesting a noticeable shift in policy. The People's Bank of China has set the daily reference rate at 6.1130 against the greenback on Monday, compared with 6.1232 set previous day, according to the data released by the China Foreign Exchange Trading System. The yuan is allowed to trade at 1% on each side of the central parity rate.
In Hong Kong, shares in the Hong Kong market advanced, with benchmark Hang Seng Index provisionally up 68.07 points to 23811.17 while the Hang Seng China Enterprises Index gained 56.75 points to 11432.92.
Among the HK 50 blue chips, 29 stocks rose and 19 fell, with two stocks remaining steady. China Merchants (00144) rose 5.5% to HK$28.8, making itself the biggest blue-chip winner.
HSBC Holdings declined 0.1% to HK$ 84.10 on rumours that the bank plans to split off its retail banking in the UK. According to media report, HSBC has asked investors if they would support a float of its U.K. unit, with the inquiries coming ahead of new regulation related to U.K. retail- banking operations. HSBC's preliminary plan would be to list a minority stake of up to 30% in the retail and commercial banking arm, according to the report.
Standard Chartered shares fell 0.2% to HK$168 following a report stated that the bank's board is divided over whether there's a need for a rights issue to strengthen its balance sheet. Last week, the lender warned that its operating profit will decline for the first time in a decade because of difficult market conditions.
Haier Electronics Group Co shares advanced 12.3% to HK$20.90 as the appliance maker received a capital injection of HK$1.86 billion from e-commerce company Alibaba Group Ltd. in an effort to bolster Haier's logistics business.
In India, firmness continued in the Indian benchmark indices mid-afternoon trade, with Sensex up 348.62 points or 1.66%, up about 65 points from the day's low and off close to 140 points from the day's high.
Advances in the Indian stocks came after a strong performance of Bharatiya Janata Party (BJP) in assembly elections. The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro-development leader -- Narendra Modi -- would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade. The market sentiment was also boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. Gains in Asian and European stocks also boosted sentiment on the domestic bourses.
BJP has secured emphatic victory in assembly elections in Madhya Pradesh and Rajasthan, a narrower one in Chhattisgarh and emerged as the single largest party in a hung Delhi assembly, giving the party and its leader Narendra Modi confidence and momentum going into next year's general elections. Aam Aadmi Party, which confounded skeptics to win 28 seats in the 70-member Delhi assembly, denied BJP, which won 31 seats, an outright victory. Congress's debacle has also fortified the perception of Narendra Modi-led BJP being the frontrunner for 2014 Lok Sabha elections. Counting of votes for assembly elections in Rajasthan, Delhi, Madhya Pradesh and Chattisgarh took place on Sunday, 8 December 2013.
The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro-development leader, Narendra Modi would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade.
Meanwhile, the counting of elections for the 40-member Mizoram Assembly which is underway today, 9 December 2013, showed that the Congress is heading towards forming a government in the state. The Congress party won in 16 seats and was leading in 7 seats.
The market sentiment in India was also boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 863.77 crore on Friday, 6 December 2013, as per provisional data from the stock exchanges.
Elsewhere in the region, New Zealand's NZX50 index rose 0.1%. Indonesia's Jakarta Composite index added 0.8%. South Korea's KOSPI jumped 1%. Taiwan's Taiex index rose 0.9%. Malaysia's KLSE Composite rose 0.8%. Singapore's Straits Times index fell 0.02%.
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