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May 28, 2012, 4:33 a.m. EDT

Asia stocks rally amid China stimulus expectation

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By Virginia Harrison and V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) — Asian markets ended higher on Monday after opinion polls in Greece showed a lead for a party favoring the country’s economic bailout in upcoming elections, with mainland Chinese stocks rising amid expectations for a policy stimulus.

Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +1.83%  climbed 0.2%, Australia’s S&P/ASX 200 Index /zigman2/quotes/210598100/delayed AU:XJO -0.71%  added 1% and Taiwan’s Taiex  advanced 0.9%, while South Korean markets were closed for a holiday. U.S. markets are also closed Monday for the Memorial Day holiday.

Overcoming choppy early trade, China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 +10.04%  jumped 1.2% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +3.81%  finished 0.5% higher.

The gains came amid reports that the National Development and Reform Commission, China’s top economic planner, approved three large steel construction projects. The approvals follow Premier Wen Jiabao last week promised pro-growth policies.

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“We have observed a significant change in the program approval process at the NDRC” following Premier Wen’s comments, Credit Suisse economist Dong Tao wrote in a report to clients.

“We believe the government has started a new round of fiscal stimulus, as local governments were asked to bring forward pending infrastructure projects last week,” he said. “Overall, we believe that the stimulus can hold the slide in growth and investment demand, but they are not enough to stage a 2009-style rebound.”

Several property, construction and mining and metals stocks jumped on Chinese bourses.

Shanghai Construction Group Co. /zigman2/quotes/207350791/delayed CN:600170 +5.00%  and China Railway Erju Co. /zigman2/quotes/202296242/delayed CN:600528 +5.89%  each rose by the day’s 10% limit, Anhui Conch Cement Co. /zigman2/quotes/204422624/delayed CN:600585 +2.91%  gained 5.8% and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +10.03%  added 3.3% in Shanghai; in Shenzhen, XCMG Construction Machinery Co. /zigman2/quotes/209700816/delayed CN:000425 +3.53% climbed 9% and Xinjiang Tianshan Cement Co. /zigman2/quotes/208568616/delayed CN:000877 +1.38%  rose 8.6%.

Chinese property and banking stocks also ranked among the best performers in Hong Kong, where China Overseas Land & Investment Ltd. /zigman2/quotes/202573805/composite CAOVY +9.24%   /zigman2/quotes/205731176/delayed HK:688 +5.48%  rose 4.1%, China Resources Land Ltd. /zigman2/quotes/209191868/composite CRBJY -4.01%   /zigman2/quotes/202417326/delayed HK:1109 +5.86%  added 3.4% and Bank of China Ltd. /zigman2/quotes/201568493/composite BACHY +7.11%   /zigman2/quotes/204682472/delayed HK:3988 +4.64%  climbed 2.5%.

Among the decliners, shares of car maker BYD Co. /zigman2/quotes/206867707/delayed HK:1211 +6.04% tumbled 5.9% amid vehicle safety concerns after weekend reports that one of its vehicles caught fire and exploded in the southern Chinese city of Shenzhen, killing three people. Read more on the fatal taxi crash.

The day’s broadly positive performance came against a relatively improved backdrop in Europe, with weekend reports citing opinion polls that put the pro-bailout New Democracy party ahead of rivals. The reports eased fears that Greece’s exit from the euro-zone was imminent.

Ric Spooner, chief market analyst at CMC Markets in Sydney, said upcoming Greek elections in June were likely to drive investor behavior in the near-term.

“If a realistic possibility of an effective pro-bailout government emerges, we are likely to see risk being re-priced and a rally in equity markets,” Spooner said in emailed comments. He added investors will remain “relatively cautious until there is clear evidence that Greece will comply with conditions enabling it to receive ongoing funding.”

Mining stocks advanced in Sydney against the backdrop, with BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -1.68%   /zigman2/quotes/208108397/composite BHP +0.34%  and Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -0.98%   /zigman2/quotes/202627887/composite RIO +0.98%  put on 1.4% and 1.7%, respectively.

Shares of Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -0.32% /zigman2/quotes/206334215/composite WOPEY +0.21%  rose 2.1% after the energy firm said its $14.6 billion Pluto liquefied natural gas terminal is operating at significantly higher capacity levels than forecast for this month.

Other energy producers also gained as crude-oil futures /zigman2/quotes/209725365/delayed CLN22 0.00% edged back above the $91-a-barrel level in electronic trading. Inpex Corp. /zigman2/quotes/206689846/delayed JP:1605 +0.67%   /zigman2/quotes/206936121/composite IPXHF -2.21%  rose 0.3% in Tokyo, Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO -1.13% added 1.9% in Sydney and Cnooc Ltd. /zigman2/quotes/204964401/composite CEO +1.94%   /zigman2/quotes/203421416/delayed HK:883 +2.11%  climbed 0.4% in Hong Kong.

In Tokyo, buying in some heavyweight stocks pulled the market higher after a choppy trading session, during which Fanuc Corp. /zigman2/quotes/202054799/delayed JP:6954 +2.66%   /zigman2/quotes/209410825/composite FANUY +2.65%  put on 2% and Fast Retailing Co. /zigman2/quotes/200663563/delayed JP:9983 +2.91%   /zigman2/quotes/203924235/composite FRCOY +2.40%  climbed 2.2%.

On the downside, shares of chip maker Renesas Electronics Corp. /zigman2/quotes/203872935/delayed JP:6723 +3.12%   /zigman2/quotes/201351352/composite RNECY +3.37%  plunged 10.6% after weekend reports that the firm plans to cut up to 14,000 jobs and raise about $1.25 billion in capital. Read more on the planned job cuts, capital raising.

Major Renesas shareholder NEC Corp. /zigman2/quotes/205173342/delayed JP:6701 +1.88%  also tumbled 9.2%.

/zigman2/quotes/210597971/delayed
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AU : Australia: Sydney
$ 95.45
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$ 56.84
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Market Cap
$95.61 billion
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$852,406
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/zigman2/quotes/203437212/delayed
AU : Australia: Sydney
$ 21.58
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Market Cap
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/zigman2/quotes/206334215/composite
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$ 42.49
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July 2, 2020 5:09p
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JP : Japan: Tokyo
¥ 665.90
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Market Cap
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AU : Australia: Sydney
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Market Cap
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Market Cap
HK$401.83 billion
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/zigman2/quotes/202054799/delayed
JP : Japan: Tokyo
¥ 19,655.00
+510.00 +2.66%
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N/A
Market Cap
¥3632.12 billion
Rev. per Employee
¥95.87M
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US : U.S.: OTC
$ 18.18
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Dividend Yield
1.09%
Market Cap
$33.54 billion
Rev. per Employee
$869,691
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/zigman2/quotes/200663563/delayed
JP : Japan: Tokyo
¥ 63,330.00
+1,790 +2.91%
Volume: 740,300
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0.76%
Market Cap
¥6282.14 billion
Rev. per Employee
¥40.83M
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/zigman2/quotes/203924235/composite
US : U.S.: OTC
$ 58.74
+1.38 +2.40%
Volume: 4,661
July 6, 2020 1:28p
P/E Ratio
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Dividend Yield
0.59%
Market Cap
$58.15 billion
Rev. per Employee
$369,206
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/zigman2/quotes/203872935/delayed
JP : Japan: Tokyo
¥ 595.00
+18.00 +3.12%
Volume: 7.59M
July 6, 2020 3:00p
P/E Ratio
67.31
Dividend Yield
N/A
Market Cap
¥989.42 billion
Rev. per Employee
¥36.92M
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/zigman2/quotes/201351352/composite
US : U.S.: OTC
$ 2.76
+0.09 +3.37%
Volume: 2,776
July 6, 2020 12:57p
P/E Ratio
67.81
Dividend Yield
N/A
Market Cap
$9.13 billion
Rev. per Employee
$334,299
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/zigman2/quotes/205173342/delayed
JP : Japan: Tokyo
¥ 5,410.00
+100.00 +1.88%
Volume: 1.51M
July 6, 2020 3:00p
P/E Ratio
13.87
Dividend Yield
1.48%
Market Cap
¥1378.41 billion
Rev. per Employee
¥26.58M
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Virginia Harrison is a MarketWatch reporter based in Sydney. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.

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