Asian markets started the week on a positive note following a higher Wall Street close Friday after EU leaders agreed to take steps for greater fiscal union and after data showed U.S. consumer sentiment hit a six month high in December.
The Nikkei closed up 1.4%. The Shanghai Composite fell 1%. The Hang Seng reversed direction to end 0.1% lower while the Sensex plunged 2.1% after government data showed a huge fall in industrial output. The S&P/ASX All Ordinaries gained 1.1%.
The two-day Brussels summit last week closed with 26 EU nations committing to adopt tougher fiscal rules and deeper economic integration with only Britain opting out of the agreement.
Market participants are now focused on a three-day summit in China where the nation's regions are gathering to decide next year’s economic targets.
Stocks on the Move
Bellwether Toyota swung between gains and losses and finally closed down 0.7% after it lowered its annual profit outlook by more than half as a result of the strong yen and the floods in Thailand.
Honda Motor advanced 0.5% while Nissan was up 1.5% after it said in a press conference jointly with Microsoft that the two companies are forming a “strategic relationship” to develop a dealer management system for use in the Japanese automaker’s cars. The system will use Microsoft’s Windows Azure platform and take advantage of its public cloud offerings to help Nissan connect with their customers.
Most other exporters also gained with Toshiba up 3.3%. Index heavyweight Sony and Panasonic were both up 1.3% and 1.9% each respectively while Sharp Corp. rose 1.2%.
Shares of scandal-hit Olympus gained 7.8% after the company said it is preparing to file its July-September earnings by Wednesday so as to avoid delisting.
Banks gave up much of their gains in Hong Kong with HSBC ending up only 0.1%. ICBC rose 0.4% but China Construction Bank Corp. declined 0.2%.
Ping An Insurance ended 0.5% lower after being up over up 3% in the morning.
China Overseas Land & Investment gave up 0.7% while Esprit Holdings fell 1.7%.
On the mainland, stocks fell to their lowest level in more than two years after the government said it would keep property curbs in place next year. Slumping growth in China’s exports to Europe added to concerns of an economic slowdown.
China Vanke dropped 1.7% on the broader market while the main Shanghai Composite listed Poly Real Estate Group fell 3.6%. Gemdale Corp. lost 5%.
Tata Power was the top loser on the Sensex in Mumbai, down 6.5%. Hindalco fell 6.4% while Jindal Steel fell 5.1%. SBI, Jaiprakash, Airtel, DLF, Coal India, RIL, ICICI Bank, Sterlite and Tata Steel all fell between 3.1% and 4.9%.
The losses came after government data showed the Index of Industrial Production, or IIP for October shrinking 5.1% compared to a growth of 1.9% a month ago. The fall came on account of a steep decline in production of almost sectors, particularly manufacturing, mining and capital goods and was the first time that the country’s industrial output fell in over two years.
Investors will look next to the third advance tax installment on Thursday for more direction. The Reserve Bank of India is also set to hold its mid-quarter monetary policy review on December 16.
Australian data showed the country’s trade surplus narrowed to A$1.6 billion in October, the least in seven months, while mortgage lending growth weakened. Exports totaled A$27.3 billion in seasonally-adjusted terms, while imports totaled A$25.7 billion, according to the Australian Bureau of Statistics.
In stock market action, resources were stronger at market close with the two major miners climbing higher. Index leader BHP Billiton was up 1.9% while fellow miner Rio Tinto gained 0.6%.
Shares in Whitehaven Coal fell 1.4% after the takeover of Aston Resources, creating Australia’s largest independent listed coal producer. Aston shares ended up 1.4%.
Qantas Airways was down 0.3% after its chief executive Alan Joyce said the current outlook for the global economy is still gloomy and that Australia will be subject to a number of difficulties.
In energy, Woodside Petroleum climbed 1.5% and Santos gained 3.2%. Origin Energy was up 3% after it signed a deal to supply more liquefied natural gas to China Petrochemical Corp as part of its Australia Pacific LNG joint venture with ConocoPhillips.
