Asia Markets

Asian stocks close mostly higher as investors bet on US tax reform; Aconex jumps 44%

Key Points
  • Asian stocks closed mostly higher, following a strong US lead from last Friday
  • The dollar drifted slightly lower against a basket of currencies
  • Republicans unveiled their final tax plan on Friday, which would see the corporate tax rate being cut from 35 percent to 21 percent
  • CME launched its bitcoin futures contract; bitcoin prices declined

Most major Asian indexes closed higher on Monday, given a boost by investor optimism that a plan to reduce corporate taxes would be passed stateside.

Japan's Nikkei 225 closed up 1.55 percent, or 348.55 points, at 22,901.77 as trading houses and banks rose. Tech and automaker blue-chips also saw gains, while several construction names declined. Toyota closed up 2.81 percent, Sony gained 3.1 percent and SoftBank climbed 1.67 percent by the end of the day.

Japan's November exports rose 16.2 percent on year, above the 14.6 percent forecast by analysts in a Reuters poll. That was the twelfth straight month that exports have gained, Reuters said.

Korea's Kospi was little changed, finishing the session off by 0.01 percent at 2,481.88, with Samsung Electronics adding 1.15 percent. Steelmakers traded lower, with Posco and Hyundai Steel closing down 2.25 percent and 4.68 percent.

Shares of automakers closed unchanged on news of an ongoing union dispute, with Hyundai Motor ending the session flat. Yonhap news reported last Friday that Hyundai workers at the automaker's Ulsan factories would be on strike on Monday and Tuesday after the company failed to meet their demands for a raise in wages.

In Sydney, the S&P/ASX 200 gained 0.7 percent to end at 6,038.9 as resource stocks gave a boost to the overall index. Rio Tinto climbed 1.22 percent and Fortescue Metals rose 0.82 percent. Banking shares were also higher on Monday, with ANZ rising 2.13 percent after the bank announced it would buy back up to A$1.5 billion ($1.15 billion) shares on-market.

Hong Kong's was up 0.98 percent at 3:10 p.m. HK/SIN, while mainland indexes finished the session mixed. The inched higher by 0.07 percent to end at 3,268.33 and the Shenzhen Composite shed 0.64 percent to finish at 1,889.13.

The People's Bank of China raised the 14-day reverse repo rate by 5 bps to 2.65 percent on Monday, Reuters reported. The move followed the central bank's decision last week to increase the seven-day and 28-day reverse repo rates and the medium-term lending facility rate by 5 bps following the Federal Reserve's December rate hike.

Investors also took note of China property price data released Monday. New home prices rose 0.3 percent in November compared to the month before and 5.1 percent compared to one year ago.

In the U.S., Republicans unveiled their final tax plan on Friday as two holdout GOP senators indicated they would support the tax bill after compromises were made. Among the provisions that made the cut was a reduction in the corporate tax rate from the existing 35 percent to 21 percent, with effect from 2018.

Republicans intend to pass the measures by the middle of this week.

U.S. stocks closed at record levels, with the Dow Jones industrial average gaining 0.58 percent, or 143.08 points, to close at 24,651.74.

The dollar drifted lower during the session. The dollar index, which tracks the greenback against a basket of six currencies, rose as high as 93.997 on Friday. At 3:00 p.m. HK/SIN, the dollar index stood at 93.842.

Against the Japanese currency, the dollar was steady at 112.67.

The bounced back after it became apparent that Narendra Modi's Bharatiya Janata Party would come out on top in the Gujarat Assembly election. The Indian currency traded at 64.11 rupee to the dollar at 3:00 p.m. HK/SIN, after slipping as low as 64.72 earlier on jitters that the BJP was facing a close fight. The rupee had closed at 64.07 on Friday.

Oil prices edged up. Brent crude futures rose 0.6 percent to trade at $63.61 per barrel and U.S. West Texas Intermediate was 0.61 percent higher at $57.65.

Bitcoin strolls onto a bigger stage

Meanwhile, CME launched its bitcoin futures contract at 6 p.m. ET Sunday, or 7 a.m. HK/SIN, under the ticker "BTC." The front-month contract traded at $19,510 at 3:07 p.m. HK/SIN. Spot prices were down around 0.5 percent on the day at $18,996.77, according to the CoinDesk index.

That came on the heels of bitcoin futures beginning trade on the Cboe Futures Exchange earlier this month. Those moves come as investor interest in the cryptocurrency grows following the rapid rise in bitcoin prices this year.

Aconex, Obayashi and more ...

Shares of Obayashi Corp. closed up 0.29 percent despite Nikkei headlines that Japanese prosecutors are likely to raid the company's offices as part of a bid-rigging investigation. Other Japanese construction companies Nikkei said was involved in the probe ended the session lower: Taisei Corporation was down 1.79 percent, Shimizu Corporation shed 2.44 percent and Kajima Corporation fell 2.68 percent.

Meanwhile, Australia's Aconex saw its shares pop more than 40 percent after the cloud collaboration company announced it had received a A$1.6 billion ($1.22 billion) acquisition offer from Oracle. Oracle has offered A$7.80 per share, a 47 percent premium above Aconex's Friday closing price.

Meanwhile, stock exchange operator Hong Kong Exchanges and Clearing announced plans on Friday to loosen existing listing rules in a bid to improve competitiveness. In its proposal are plans to allow the listings of biotechnology issuers in the pre-profit stage and to accept issuers with dual share classes, subject to safeguards. Shares were up 4.51 percent by 3:06 p.m. HK/SIN.

Correction: This story has been updated to reflect that ANZ said it would buy back up to A$1.5 billion shares. An earlier version misstated the currency of the announced buyback.