Asian stock markets staged a comeback Monday after Friday's steep losses, as worries about the potential negative impact of a Dubai debt default began to fade.
Signals were mixed on how long the flight to less risky assets might last, with U.S. shares coming back up off their lows by the end of a short trading day on Friday as some market players said worries about Dubai had been offset by the desire of investors to take profits as the year-end approaches.
Dubai's crisis exploded last week when the emirate, known for flashy lifestyles and the world's tallest building, said it would delay payment on debt issued by one of its flagship firms, angering investors and sending global markets sharply lower.
Japan's Nikkei Average surged, with bank shares surging as concerns about debt default in Dubai eased, while Canon and other exporters gained after the yen retreated from a 14-year high on the dollar.
The Nikkei climbed 264.03 points to 9,345.55, regaining much of the ground it lost on Friday when it was hit by the yen's appreciation to a 14-year high against the dollar and concerns about Dubai.
The broader Topix advanced 3.6 percent to 839.94.
Banks gained on short-covering after recent extended losses due to worries that other banks might follow Mitsubishi UFJ Financial Group and raise capital, with Dubai having added to the downward pressure.
MUFG shot up 8.6 percent to 482 yen, No. 2 bank Mizuho Financial Group surged 9.5 percent to 162 yen.
Exporters got an additional boost after the yen retreated, with it trading around 86.30 yen to the dollar, well off a 14-year low of 84.82 yen hit on Friday on EBS. Canon advanced 4.1 percent to 3,330 yen and Toyota Motor climbed 4.2 percent to 3,440 yen.
Sumitomo Corp jumped 4.7 percent to 850 yen after Credit Suisse lifted its rating on the trading house to "outperform" from "neutral", saying the stock looks heavily undervalued.
In the latest domestic capital raising, Miyazaki Bank plunged 19.7 percent to 309 yen after it announced it would raise up to 12.2 billion yen in a share issue that could lift its number of shares outstanding by 20 percent.
Seoul Shares 2% Higher
Seoul shares ended 2 percent higher amid easing Dubai debt fears and helped by a regional
market rebound, with banks and builders including Woori Finance leading gains.
The Korea Composite Stock Price Index (KOSPI) finished up 2 percent at 1,555.60 points, but still below its 60-day moving average of about 1,596 points.
Banking and construction issues, which had suffered most on Friday, rebounded, fueling the upward momentum.
Woori Finance Holdings jumped 9.4 percent. A spokesman for unit Woori Bank said that the bank's direct exposure to Dubai was about $7.4 million.
The financial sub-index finished up 3.61 percent, while the construction sub-index rose 2.81 percent.
Samsung Engineering jumped 7.43 percent and Hyundai Engineering & Construction gained 3.92 percent.
But defensive issues which had outperformed during markets' recent falls, lagged as investors returned to growth issues amid the broader rebound.
SK Telecom, South Korea's No.1 mobile phone operator, fell 0.59 percent and Hite Brewery, South Korea's top brewer, lost 0.31 percent.
Elsewhere tourism stocks rallied on the back of the won currency's rebound and expectations of increased demand for overseas travel during the holiday season.
Hana Tour rose 4.16 percent and Modetour climbed 7.52 percent.
Australia Shares Jump as Banks Rebound
Australian stocks rebounded 2.8 percent on Monday in light volume, with banks recovering from steep losses as investors were reassured that fall-out from the Dubai debt crisis would be limited.
The major banks confirmed they had no material exposure to the Dubai crisis, and top lender National Australia Bank rose 6 percent to A$28.62 in its best single-day rise since April 3.
The benchmark S&P/ASX 200 index rose 129.28 points to 4,701.3, based on the latest figures, its largest one-day gain since Aug. 24.
Commonwealth Bank shares gained 4.4 percent to A$52.80 after the bank said it has a financial exposure to Dubai World but does not expect to incur a material loss, making it the
last of the big four local banks to calm investor fears.
Energy Developments shares jumped 11.6 percent to A$2.69 after private equity firm Pacific Equity Partners increased its cash bid for the renewable energy firm to A$2.75 per share.
Upmarket department store David Jones gaining 1.2 percent after it said was cautiously confident about sales in the lead-up to Christmas, and added it was discounting less
merchandise than last year.
On the eve of a possible third interest rate hike from the central bank, CEO Mark McInnes also told reporters shoppers were more sensitive to rate hikes given the uncertain economic
Caltex Australia shares jumped 6.1 percent to A$9.72, after analysts at Macquarie upgraded the stock and said they expect competition authorities this week to clear its A$300 million purchase of ExxonMobil petrol stations, a broker said.
China Finishes Higher for Third Straight Month
China's key stock index rose 3.2 percent, posting a third consecutive monthly gain, led by consumer-related and brokerage shares after authorities reassured investors they would stick with economic stimulus, sparking a market rebound after last week's slide.
The Shanghai Composite Index ended up 3.2 percent at 3,195.301 points, marking its biggest one-day percentage gain in more than seven weeks and rising 6.7 percent for the month.
Gaining Shanghai A shares overwhelmed losers by 890 to 6 while turnover dropped to a two-week low of 159 billion yuan ($23.29 billion) from Friday's 171 billion yuan.
The ruling Communist Party announced after the market closed on Friday that China would stick to its "appropriately" loose monetary stance and active fiscal policy as it continues to implement stimulus measures in 2010 to cushion the fallout from the global financial crisis.
Auto stocks sharply outperformed after Vice Commerce Minister Jiang Zengwei said China would expand schemes that give consumers a discount if they trade in old cars and household appliances for new ones -- a key step in China's efforts to expand domestic consumption in its economic stimulus programme.
China's top auto maker SAIC Motor surged 7.5 percent to 25.37 yuan while Qingdao Haier, a leading home appliance producer, jumped its 10 percent daily limit to 23.49 yuan and was one of the day's biggest gainers. Wuliangye Yibin, one of China's top liquor makers, rose its
10 percent daily limit to 28.44 yuan.
Haitong Securities jumped its 10 percent limit to 16.06 yuan while CITIC Securities rose 6.88 percent to 29.19 yuan.
Hong Kong's Hang Seng Index also rose, up 3.3 percent, led by a rebound in banking shares, particularly HSBC and Stanchart.
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