By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) -- Stock indexes in Sydney and Bombay rocketed to all-time highs Monday, lifted by takeover activity and bullish sentiment following upbeat earnings, while Tokyo's Nikkei 225 lost ground.
The Japanese benchmark average /zigman2/quotes/210597971/delayed JP:NIK -1.42% fell 1.9% to close 16,351.85, slipping after weak quarterly data on U.S. gross domestic product reported last Friday weighed on exporters such as Toyota Motor and Honda Motor.
Australia's S&P/ASX 200 gained 0.8% to a record close of 5,399.40, besting a previous record close set last week.
In intraday trading, the index touched a high of 5,409.9, propelled by a rally in construction stocks after Australian building-materials company Rinker Group received an unsolicited bid $11.7 billion takeover bid from Mexico's Cemex SAB (TICKER:CX). Shares of Rinker jumped 26.5%, posting a second day of sharp gains.
India's 30-issue Sensitive Index, listed on the Bombay Stock Exchange, rose 0.9% to 13,024.26, after setting a fresh high of 13,039.30 earlier in the session.
Brokers attributed the gains to earnings that came in at the top end of estimates and strong overseas fund flows. Foreign investors have pumped $6.43 billion into Indian stocks in the year to Oct. 26, according to the Securities & Exchange Board of India.
U.S. stock indexes ended weaker Friday after the government reported the economy grew at a slower-than-expected annual rate of 1.6% in the third quarter, below economists' expectations of 2% growth.
In Japan, data released ahead of trading showed industrial production fell 0.7% while inventories rose slightly in September from a month earlier, according to the Nikkei daily, citing figures from the Ministry of Economy, Trade and Industry.
Elsewhere around Asia, South Korea's Kospi was down 1% and Taiwan's Weighted Price Index was down 1.3%. Singapore's Straits Times Index was down 1.4%, while Malaysia's KLSE Composite was down 0.4%.
On the upside, Shanghai's Composite Index was up 0.1%, Indonesia's Jakarta Composite rose 0.5% and New Zealand's NZX-50 Index rose 1%, led by gains in construction companies. Hong Kong markets were closed for a public holiday.
Sean Darby, Asia regional economist with Nomura, cautioned that equity markets are vulnerable to a "sharp correction" in the next two months as investors unwind leveraged positions.
"The heavy borrowing in yen has driven risk appetite to insatiable levels, while pushing the vulnerability of equity markets toward a sharp correction as positions are closed at year-end," Darby wrote in a note to clients. "We expect Asia's equity markets to experience a repeat of the midyear setback, but with some segments witnessing far greater volatility than others."
In Japan, corporate earnings again dominated the spotlight.
Shares of Matsushita Electric Industrial Co. /zigman2/quotes/201785256/delayed JP:6752 -0.39% /zigman2/quotes/200706257/composite MC -0.58% , maker of the Panasonic brand, fell 2.2 % after reporting earnings rebounded in the fiscal second quarter but left its full-year fiscal forecasts unchanged.
NTT DoCoMo Inc. , Japan's top wireless operator, traded flat after the group announced Friday a 20% decline in group net profit for the fiscal first half.
Mitsubishi Motors Corp. /zigman2/quotes/202404490/delayed JP:7211 -4.35% /zigman2/quotes/200823070/delayed JP:9506 +0.99% , Mitsubishi Electric Corp. /zigman2/quotes/207150000/delayed JP:6503 +0.20% /zigman2/quotes/206004588/composite MIELY -1.22% , Nippon Oil Corp. , Kyocera Corp. /zigman2/quotes/204880749/delayed JP:6971 -1.92% and Tokyo Gas Co. /zigman2/quotes/204721803/delayed JP:9531 +0.09% were among the other major companies due to report Monday.
Under selling pressure, shares of Toyota /zigman2/quotes/200537742/composite TM -0.47% /zigman2/quotes/203803129/delayed JP:7203 -2.37% closed down 1.6% in Tokyo, while Honda /zigman2/quotes/207173990/composite HMC -1.04% /zigman2/quotes/200490352/delayed JP:7267 +0.35% fell 3.3%.
Softbank Corp. /zigman2/quotes/207303954/delayed JP:9984 -1.09% /zigman2/quotes/202815238/composite SFTBF +5.52% , Japan's third-largest wireless operator by subscribers, rose 0.8%. On Sunday, Softbank temporarily stopped accepting cellular account transfers because of computer system problems, the Nikkei daily reported.
In New Zealand, shares of construction firm Fletcher Building Ltd. /zigman2/quotes/200215142/delayed NZ:FBU 0.00% rose 4.4% on bullish sentiment toward the construction sector following the Cemex bid for Rinker.
In Seoul, shares of Hynix Semiconductor Inc. fell 3.1% after Goldman Sachs warned Friday that falling demand for PC motherboards pointed to a cyclical slowdown in the information-technology sector.
Also on the move in Sydney, miner Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO -3.99% rose 3.1% after announcing it would beef up its share-buyback program. Rival BHP Billiton /zigman2/quotes/208108397/composite BHP -0.66% /zigman2/quotes/201448516/delayed AU:BHP -3.35% rose 0.8% after J.P. Morgan lifted its resources recommendation to overweight from overweight, citing undervaluation among the big miners relative to ore prices.
In currencies, the dollar was quoted at 117.27 yen, down from its level of 117.61 yen in late New York dealings.
Crude oil for December delivery fell 47 cents to $60.28 a barrel in electronic trading. The benchmark contract rose 39 cents to close out the trading week Friday on the New York Mercantile Exchange.
Gold for December delivery was up $4.30 to $605.30 an ounce. In New York, the benchmark gold contract ended up $1.20 an ounce on Friday.
In Friday's action on Wall Street, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.89% closed down 78 points at 12,090.26, the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.10% dropped 12 points to 1,377.34 and the Nasdaq Composite gave up 27 points to 2,350.62.