Earnings Drive Asian Markets Trading, KDDI Launches Tender Offer to take Lawson Private

Arjun Pandit
06 Feb, 2024
Mumbai

Asian markets advanced tracking gains in overnight trading in New York as investors reassessed interest rate expectations and reacted to the latest batch of earnings.

In overnight trading, markets in New York edged higher as investors shifted their focus from rate uncertainty to the latest corporate results.

 

Nikkei Lacked Direction, KDDI Pursues Lawson

Market indexes in Japan edged higher, and those in China advanced for the second day in a row in the hopes that policymakers will provide more support and the sovereign wealth fund will continue to purchase stocks and stabilize markets.

The Nikkei 225 average declined 0.2% to 36,076.22, and market indexes trimmed losses amid positive corporate earnings.

Toyota Motor jumped 3.9% to ¥3,260.0 after the largest automotive company in the world by unit sales reported better-than-expected fiscal third-quarter sales.

The vehicle manufacturer also increased its full-year revenue outlook on the back of the strength in hybrid sales.

GS Yuasa soared 20% to ¥2,541.0 after the maker of lead acid and lithium-ion batteries reported sales in the nine-month ending in December rose 9.8% to ¥411 billion and net income more rose 124% to ¥17.7 billion.

The company forecasted fiscal year sales to increase 8% to ¥560 billion and net income attributable to shareholders to jump 51% to ¥21 billion.

Lawson jumped 13% to ¥10,280.0 after the retailer received a tender offer from KDDI for ¥500 billion or $3.4 billion, and after the deal, Mitsubishi Corp. and KDDI will jointly own the company with an equal stake of 50% each.

KDDI, the telecom company plans to use data from convenience store to promote its banking and insurance and offer Lawson products to customers of its 2,200 'au' mobile phone outlets across Japan. 

 

China Indexes Extended 2-Day Gains

Market indexes in Shanghai and Hong Kong advanced for the second day in a row amid optimism that policymakers are working on additional steps to stabilize financial markets.

The Chinese regulators also banned securities lending to brokers for selling short, arresting the market decline in the short term.

Benchmark indexes in the previous session jumped 4% in Hong Kong and 3% in Shanghai after a unit of China's sovereign wealth fund confirmed purchasing index-focused exchange-traded funds.

The CSI index advanced 0.5% to 3,326.57, and the Hang Seng index edged down 0.1% to 16,124.92.

China's stock markets are expected to resume their selling as the government struggles to devise plans to support overleveraged property developers and plunging property prices. 

Over the years, Chinese local governments relied on the sale of land to property developers to fund rapid but wasteful infrastructure buildup, which came to a screeching halt during the pandemic-era lockdowns.

Residential buyers also walked away from making additional purchases after several large developers failed to complete housing projects, adding to the price declines.

Travel and entertainment-related stocks were in focus ahead of the start of the Lunar New Year holidays.

Chinese hotpot restaurant chain Haidilao jumped 1% to HK$13.28.

Yum China added 13.8% to HK$330.0 after the fast food company reported rising sales and announced its plan to buy back its shares.

Alibaba Group declined 1.8% to HK$75.0 ahead of the company releasing its quarterly results later in the day.

Longfor, China Resources Land, and China Vanke decreased between 0.3% and 2.5%.

 

India Indexes Extended Gains Following Steady Fund Flows and Positive Earnings

Stocks in Mumbai opened higher, and investors reacted to the latest batch of earnings.

Benchmark indexes advanced in early trading amid earnings optimism and a steady flow of new funds from domestic and international investors.

Banks, financial services providers, food product makers, and tech services were among the leading gainers.

The Reserve Bank of India is widely anticipated to hold rates steady at the end of its policy meeting on Thursday.

The Sensex index increased 152.47 points to 72,338.57, and the Nifty index gained 52.40 points to 21,981.80.

On the Mumbai stock exchange, 311 stocks traded at their 52-week highs and 16 stocks traded at their 52-week lows.