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Asia stocks lifted by outbreak of dealmaking

Monday 03.40 BST

Overview

Stocks rallied in Asia as a batch of deals lifted sentiment, while bond yields continued to react to hawkish comments from central bankers last week.

Hot topic

Stocks in Asia were broadly higher on Monday, driven up in part by a host of deals in the region.

In Hong Kong Orient Overseas International rose 20 per cent in Hong Kong on Monday after Cosco Shipping announced a $6.3bn takeover deal for the shipping company. The broader Hang Seng index was up 0.9 per cent.

In Tokyo the benchmark Topix index was up 0.5 per cent as industrials rallied. East Japan Rail shares climbed 1.4 per cent on plans by the company to build a new train capable of reaching 360km/h.

Sydney’s S&P/ASX 200 index was up 0.7 per cent as the financial segment climbed 1.1 per cent. Commonwealth Bank shares were up 1 per cent on news that the company’s branch in Ho Chi Minh city would be acquired by Vietnam’s VIB.

Forex

The greenback was stable in Asia trading, though changes were visible beneath the dollar index, which measures the buck against a basket of peers and was flat at 95.987.

The yen pushed above the ¥114-mark and was hovering near ¥114.2 on Monday, its weakest against the dollar in nearly two months.

Outside Asia Pacific the Mexican peso was faring best, up 0.3 per cent at 18.0266 per dollar.

Fixed income

Sovereign bonds were falling further in Monday Asian trade following Friday’s sell-off, prompted by hawkish comments from global central bankers.

Australian 10-year government bonds saw yield up as much as 2 basis points at 2.745 per cent, the highest since May 9. Bond yields move inversely to price.

Japan’s equivalent note saw yield up 1bp at 0.086 per cent, while that for South Korea’s 10-year note rose 2bp to 2.317 per cent.

The yield on 10-year US Treasuries was flat, however, at 2.389 per cent.

Commodities

Oil prices were on the rise after finishing last week on a lacklustre note.

Brent crude was up 0.8 per cent at $47.09 a barrel, having dropped 2.5 per cent over the course of last week.

West Texas Intermediate, the US marker, had gained 0.8 per cent to $44.60, after closing last week down 3.9 per cent.

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