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Asia markets mostly up, shrugging off concerns over failed coup in Turkey

Brendon Thorne | Bloomberg | Getty Images

Markets in Asia traded mostly up on Monday, ahead of a relatively data-light week in the region, shrugging off the failed military coup in Turkey.

In Australia, the benchmark ASX 200 closed up 28.93 points, or 0.53 percent, at 5,458.50, with most sectors finishing in the green. The materials sub-index, however, closed down 0.13 percent, with major miners falling behind. Shares of Rio Tinto closed down 0.81 percent, Fortescue fell 2.6 percent and BHP Billiton shed 0.74 percent.

South Korea's Kospi index added 3.85 points, or 0.19 percent, to 2,021.11. In New Zealand, the NZX 50 finished up 33.07 points, or 0.46 percent, at 7,105.95.

Hong Kong's gained 0.66 percent, or 143.93 points, to 21,803.18. Chinese mainland markets fell behind their regional peers, with the composite closing down 10.38 points, or 0.34 percent, at 3,043.90, while the Shenzhen composite ended lower by 10.85 points, or 0.53 percent, at 2,027.87.

Markets in Japan were closed for the Marine Day public holiday.

A failed military coup in Turkey to oust President Recep Tayyip Erdogan, which played out over the weekend, sent the Turkish lira tumbling against the dollar and the euro. The dollar was fetching 2.93 lira, after spiking as high as 3.0476 lira, compared with levels below 2.90 lira before the incident.

"Mr. Market woke from the weekend and decided that Turkey's failed coup was a domestic affair which will blow over quite fast. Turkey's still too dependent on foreign funding for comfort and the lira bounce can't go that much further, but the broader market implications are limited," Kit Juckes, a global fixed income strategist at Societe Generale, said in a note Monday.

The Straits Times index in Singapore appeared to have shrugged off the city-state's latest round of export data, edged up 0.06 percent by 4:35 p.m. HK/SIN.

In Singapore, non-oil domestic exports (NODX) fell 2.3 percent on-year in June, compared with an expected 3 percent drop in a Reuters poll. In May, overseas shipments from Singapore unexpectedly jumped 11.6 percent on-year, fueled by gold and pharmaceuticals sales, reported Reuters.

"June's contraction should be seen in the context of a normalization of the sharp rise in the May NODX print, which was clearly unsustainable," said Weiwen Ng, an economist at ANZ. "Singapore's exports to China continued to decline, underscoring Singapore's vulnerability to the waning momentum of the Chinese economy."

Singapore Exchange, which operates the country's stock market, said Monday it will create a separate subsidiary company, called RegCo, which would handle all of its regulatory functions. The new company, expected to be set up by the second half of 2017, will have its own board of directors, separate from that of the SGX. RegCo will be headed by Tan Boon Gin, who is the chief regulatory officer at SGX.

In a statement to the media, Singapore's central bank, the Monetary Authority of Singapore, said SGX's decision to hive its regulatory functions into RegCo was an important step to strengthen the safeguards in place to manage conflicts of interest between the exchange operator's commercial and regulatory roles.

Shares of SGX rose 0.78 percent by 4:34 p.m. HK/SIN.

Asia-Pacific Market Indexes Chart

In the broader currency market, the dollar strengthened against a basket of currencies; the dollar index was at 96.579 as of 3:24 p.m. HK/SIN, climbing from levels near 96.00 in the previous week. Experts said improvements were related to better-than-expected stateside data released late last week.

Among other major currency pairs, the Japanese yen traded at 105.83 against the greenback after climbing as high as 105.96 earlier, compared with levels near 100 two weeks ago.

The Australian dollar traded at $0.7602, climbing from an earlier low of $0.7572. The Aussie received a boost last week from better-than-expected Chinese data, as China is a major trading partner for Australia.

"The news gave the Aussie a strong shot in the arm, but the momentum was unsustainable as better-than-expected U.S. data lifted the greenback," explained Kathy Lien, managing director of foreign exchange strategy at BK Asset Management in a Friday note.

Oil prices wavered during the Asian session, with global benchmark Brent trading up 0.44 percent at $47.82 a barrel, while U.S. crude was nearly flat at $45.99.

In company news, Japan's internet and telecommunication giant SoftBank confirmed media reports that it agreed to acquire U.K. chip designer, Arm Holdings, for 23.4 billion pounds ($31 billion) in an all-cash deal. SoftBank will pay 17 pounds for each share in Arm, a 43 percent premium to its closing price last week.

SoftBank shares had closed up 0.23 percent at 6,007 yen on Friday and were not trading on Monday due to a public holiday in Japan.

In Malaysia, shares of Malaysia Airports Holdings fell 4.81 percent by 4:34 p.m. HK/SIN. Analysts indicated the sell-off may be due to uncertainties in Turkey, following the failed military coup over the weekend and an earlier terrorist attack in Istanbul. Malaysia Airports owns Istanbul's secondary airport, ISG, which analysts at CIMB said will likely see declines in international traffic in the second half of the year.

CIMB cut its valuation of ISG by 31 percent and lowered its core earnings per share forecasts for 2016-2018 by 19-35 percent.

Elsewhere, multiple wire reports said the Singapore government's investment arm, Temasek, is considering buying the remaining shares of Singapore subway operator, SMRT, that it doesn't already own. Temasek already owns a 54 percent stake in SMRT and by purchasing the rest of the shares, it has plans to de-list SMRT, Dow Jones Newswires reported, citing people familiar with the matter.

When contacted by CNBC, both Temasek and SMRT said they do not comment on market speculation and rumors. SMRT's shares remained on a trading halt.

Last week, SMRT announced it reached a deal to sell its infrastructure assets, including the trains, to Singapore's Land Transport Authority (LTA) for an estimated value of 1.1 billion Singapore dollars; payments will be made in tranches. SMRT said it does not intend to pay any special dividend to shareholders from the asset sale, and that part of the proceeds would be used to pay off some of its existing debt.

Analysts were skeptical about the rail asset acquisition. CIMB analysts called the deal a "timely bailout by the LTA, before SMRT potentially runs into solvency problems under the old framework."

Jame Osman from Daiwa Capital Markets said the timing of the announcement was a surprise. "We had thought that the Singapore government would want SMRT to fulfill its rail reliability obligations prior to any asset purchases by it," Osman wrote in a note.

Stateside, major indexes closed mixed on Friday. The closed 10.14 points, or 0.05 percent, higher at 18,516.55, but Dow futures dropped in the late session on the back of news from Turkey. The S&P 500 closed 2.01 points, or 0.09 percent, lower at 2,161.74, while the ended down 4.47 points, or 0.09 percent, at 5,029.59.

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