By Ese Erheriene
Japanese equities led regional gains on Monday, as a landslide election victory for the country’s ruling party set the benchmark index there on course for a record 15th session of consecutive gains.
Prime Minister Shinzo Abe’s coalition government won a national election Sunday, retaining a two-thirds majority. Should Abe hold on to his position through November 2019, he would become the country’s longest-serving prime minister.
While polls had largely been in Abe’s favor, his win raises investor hopes of continued market-friendly monetary policies and economic reforms.
“Abe’s victory confirms his loose policy-mix style and may entice foreign investors back to the market,” said Frank Benzimra, head of Asia equity strategy at Société Générale, reiterating his advice for investors to pick companies with high capital-expenditure plans.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -2.78% was up 1.1% in afternoon trade, with a weaker yen helping the country’s export-focused stocks. The Japanese currency /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1449% was down 0.2% against the dollar.
The yen weakened Friday and has continued on that trend, with the dollar climbing to fresh three-month highs, briefly hitting ¥114 yen. The currency pair was last at ¥113.82.
Though most of the Asia-Pacific followed Japan’s lead, Hong Kong stocks markedly underperformed. The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.43% quickly reversed its opening gains as investors grew cautious on Chinese banks ahead of their earnings releases this week. Declines in property stocks also acted as a drag on the index. The benchmark index was last down 0.6%, having narrowed earlier losses of more than 1%.
Among individual shares, China Construction Bank /zigman2/quotes/208974133/delayed HK:939 -0.94% was down 0.7%, while Industrial & Commercial Bank of China /zigman2/quotes/201401473/delayed HK:1398 -0.95% fell 2.1%. Pan-Asian insurer AIA /zigman2/quotes/203565558/delayed HK:1299 -0.89% , another index heavyweight, shed a further 1.9% to a two-week low. In real estate, Henderson Land /zigman2/quotes/208724890/delayed HK:12 -1.88% and Hang Lung Properties /zigman2/quotes/200230831/delayed HK:101 -2.16% were both off more than 1%.
In other China-related markets, the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -1.84% was flat in the morning session, while the Shenzhen main board /zigman2/quotes/210598015/delayed CN:399106 -1.62% was flat and the startup-heavy ChiNext index /zigman2/quotes/210597993/delayed XX:SZX00067 -1.24% rose 0.6%.
More broadly, stocks across the region were boosted by another record run on Wall Street on Friday, after the U.S. government passed a 2018 budget, which market participants believe will pave the way to tax reform.
Taiwan’s Taiex was up 0.1%, Singapore’s Straits Times Index /zigman2/quotes/210597985/delayed SG:STI -0.99% added 0.1%, and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.86% was down 0.2%. New Zealand and Thailand were closed for public holidays.
South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -2.99% was slightly higher after briefly topping 2500 points for the first time ever earlier in the session.
“Worries about stock market valuations are likely to diminish in volume whilst tax reform momentum remains strong,” said Rob Carnell, head of Asia-Pacific research at ING. However, he expects such concerns to return to the market.
In commodities, oil prices edged higher in Asian trade, building on Friday’s gains, as U.S. oil-rig activity continued to fall last week. Brent , the global crude oil benchmark , was up 5 cents at $57.80 a barrel, while Nymex futures were up $0.27 at $52.11 a barrel.
Noble Group Ltd. /zigman2/quotes/206492636/delayed SG:CGP -2.41% fell 6.6% after the commodity trader said it expects to report a third-quarter net loss of between $1.1 billion and $1.25 billion.
Suryatapa Bhattacharya and John Wu contributed to this article.