By V. Phani Kumar and Michael Kitchen, MarketWatch
HONG KONG (MarketWatch) -- Asian stocks rallied Monday as news
that Cyprus and its international lenders reached a bailout
agreement removed fears of the nation's exit from the euro zone,
also helping boost U.S. equity futures, the euro and crude-oil
prices.
Under the broad terms of the bailout agreement, Cyprus will
receive 10 billion euros ($13 billion) in bailout funds for its
banks, while depositors holding less than EUR100,000 in their
accounts will be spared from any deposit taxes.
Japan's Nikkei Stock Average and South Korea's Kospi jumped 1.5%
each, while Hong Kong's Hang Seng Index added 0.6%, and Australia's
S&P/ASX 200 index climbed 0.5%.
On the downside, the Shanghai Composite Index fell 0.1% in
choppy trading.
News of the deal also buoyed U.S. stock-index futures, with
those on the Dow Jones Industrial Average (DJM3) rising 49 points,
or 0.3% to 14,508. Futures on the S&P 500 (SPM3) and Nasdaq 100
(NDM3) climbed 0.5% each.
Among other assets, the euro (EURUSD) climbed back above the
$1.30 level, while benchmark U.S. crude-oil futures advanced about
0.4% in commodities trading.
"The bailout deal will mean that the risks of Cyprus defaulting
and leaving the euro zone will have significantly diminished," said
Crédit Agricole's Asia head of global markets research Mitul
Kotecha.
However, he cautioned about the sustainability of the rally.
"The deal will still involve a huge amount of work on Cyprus's
part to find the $5.8 billion needed to supplement the EUR10
billion bailout, and subsequently, a lot of economic pain
involved," Kotecha said. "The current risk rally is likely to fade
quickly as markets begin to focus on the task at hand."
Financial stocks across the region joined in the relief
rally.
Nomura Holdings Inc. (NMR) rose 2.2% in Tokyo, while Macquarie
Group Ltd. (MCQEF) gained 2.6% and Westpac Banking Corp. (WBK)
added 1.3% in Sydney.
In Seoul, Woori Finance Holdings Co. (WF) zoomed 4.6%, and in
Hong Kong, Ping An Insurance Group Co. (PNGAY) climbed 0.8%.
In Japan, retailers extended the strong gains they have enjoyed
in recent sessions, with Takashimaya Co. (TKSHF) jumping 6.8% and
Fast Retailing Co. (FRCOY) adding 3.3%.
The advance came even as a Europe Union summit with Japan was
delayed due to the Cyprus crisis. The two are due to discuss a
wide-ranging free-trade deal.
In Hong Kong, the market saw support by gains in China
Construction Bank Corp. (CICHY) and refiner China Petroleum &
Chemical Corp., or Sinopec (SNP), following their 2012 earnings
reports.
CCB shares climbed 1.5% after the company narrowly beat
estimates with a 14% increase in 2012 profit, while Sinopec shares
jumped 2.5% in spite of a 13% drop in its annual profit.
In Shanghai, shares of CCB climbed 1.5%, but Sinopec fell
1.8%.
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