By Daniel Inman
Asian stocks moved higher on Monday, with Australia hitting a fresh-five year high, as shares bounced back from recent falls.
Regional markets started the week in recovery mode, following a series of declines last week that hit Japan and China especially hard. A pickup in interbank lending rates in China spooked investors and yanked the Shanghai Composite down 2.8% last week, while a strong yen helped the Nikkei Average sink 3.3% over the same period.
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A positive lead from Wall Street, where the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.48% hit a record high on Friday, and the absence of fresh negative catalysts allowed Asian stocks to bounce back.
The coming week promises to be a busy period in terms of earnings news for the region, while the U.S. Federal Reserve’s policy meeting later on in the week will be a focus as investors look for clues on the central bank’s stimulus plans.
Looking ahead to November, markets are anticipating an important Communist Party meeting in China, where there are expectations that the country’s new government will unveil economic reforms.
Early in Asia, the yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1725% weakened slightly, with the dollar trading at ¥97.60, compared with ¥97.40 late Friday in New York.
“Even small dollar movements were amplified, triggering buybacks after shares were oversold last week,” said Daiwa Securities chief strategist Junya Naruse.
The softer yen allowed the Nikkei Average /zigman2/quotes/210597971/delayed JP:NIK +0.84% to climb 2.2%, coming back from a hefty 2.8% fall on Friday.
China was mixed, with Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +3.39% up 0.5%, and the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +2.07% up less than 0.1%.
China Construction Bank /zigman2/quotes/208974133/delayed HK:939 +2.96% /zigman2/quotes/209484779/delayed CICHF -3.40% , China’s second-largest bank by profits, despite its third-quarter net profit coming in slightly below market expectations.
China Life Insurance Co. /zigman2/quotes/202359856/delayed HK:2628 +3.44% /zigman2/quotes/206573290/composite LFC +1.28% rose 1.8% after China’s largest life insurer by premiums reported that it had made a 7.5 billion yuan ($1.2 billion) profit in the third quarter, reversing a 2.2 billion yuan loss in the same period last year.
Also in Hong Kong, Chong Hing Bank /zigman2/quotes/206943640/delayed HK:1111 +2.25% sank 8% after Chinese conglomerate Yuexiu Enterprises said on Friday it will acquire a majority stake in the Hong Kong lender for $1.5 billion — the first local-bank sale in several years.
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In Tokyo, telecoms firm KDDI Corp. /zigman2/quotes/204923990/delayed JP:9433 +0.99% /zigman2/quotes/209186068/delayed KDDIF +0.58% rose 3% after a Nikkei report said that the firm will likely report a record first-half group operating profit, with a 50% on-year increase. TDK Corp. /zigman2/quotes/208948266/delayed JP:6762 +2.58% /zigman2/quotes/203182885/delayed TTDKF +2.23% , rose 1.5% after a separate Nikkei report said that the electronics-component producer will report an 8% increase in operating profit over the same period.