Mood in Asia is uncertain early on Monday
The Asian markets opened on Monday morning with an unusual sense of uncertainty in the air. The Nikkei instantly rose to a five and a half year high of 14,766, an advance of 1.1 percent, as a reaction to the surge that took place in the US on Friday, lead by the Topix which made gains of 1.2 percent. Further weakening of the Yen also made for solid gains by exporters, which makes up a large portion of the Nikkei’s constituents.
With the knock on effects of the Bank of Japan’s monetary policies still having a drastic effect on the Yen, it is widely expected that this trend will continue, potentially leading to large gains for the Yen throughout the days trading.
Meanwhile, the markets in Hong Kong were expected to open 0.3 percent lower than their close on Friday. The sudden withdrawal of funds from the market is being attributed to data that was released late on Friday evening which showed Chinese bank lending had fallen in April. Chinese banks loaded 792.9 billion yuan in April, 7.1 billion off the anticipated 800 billion yuan. It also represented a decline of more than 20% when compared to the stats from March. With lending down it is expected that investors will remain idle until China’s retail sales, urban investment and industrial output reports are released later in the day.
The retreat will have hit sentiment hard and leave investors in a cautious mood, in contrast to last week when both the China Enterprises Index and the Hang Seng made gains of 4.6 percent and 2.8 percent respectively.
One of the key stocks today will have the more adventurous investors monitoring it, regardless of the imminent data to be released. China State Construction Engineering were announced as the winners of a $1.4 billion contract for MGM China Holdings Ltd’s for their latest project in Macau, which is has been described in the past as “the vegas of Asia”. Naturally, as with any contract with such a large financial windfall, a sharp rise is to be expected.