Asian markets rose Monday as investors were encouraged by the announcement of the Spanish bank aid deal and a report of less worrisome data from China over the weekend.
The Chinese Shanghai composite index climbed 1.07 percent or 24.41 points to 2,305.86. Hong Kong's Hang Seng advanced 2.44 percent, or 451.29 points, to 18,953.63. Major gainers were Cosco Pacific Ltd (5.86 percent), China Life Insurance Co (5.79 percent) and HSBC Holdings Plc (2.78 percent).
Japan's Nikkei Stock Average climbed 1.96 percent, or 165.64 points, to 8,624.90. Among major gainers were Sharp (6.6 percent), TDK (5.9 percent), Mazda Motors (4 percent) and Canon (3 percent). South Korea's KOSPI rose 1.71 percent, or 31.40 points, to 1,867.04.
India's BSE Sensex rose 0.43 percent, or 72.12 points, to 16,790.99, tracking positive cues from other Asian markets. Stocks of banks, metals, power, auto and capital goods companies rose. Major gainers were Sterlite Industries (4 percent), Tata Power (3.6 percent), Bajaj Auto (2.5 percent), ICICI Bank (1.9 percent) and State Bank of India (1 percent). The Indian rupee gained 17 paise to touch 55.24 against the dollar.
Market sentiment turned positive as the eurozone finance ministers agreed to lend 100 billion euros ($125 billion) to Spain. Investor confidence was down in the last two weeks due to the uneasy condition of Spain's banking sector that added to the debt crisis looming over the eurozone. Spain's economic situation, which posed a serious threat to its financial stability, was kept on a close watch by the markets. The bailout request for its banks has buoyed sentiments all around.
The weakening of the government's ability to support its banks in the crisis situation and Spain's first-quarter descent into a recession had generated a negative response in the financial markets. But the agreement on the bailout for Spanish banks reversed the mood of the markets to positive.
China's major macroeconomic data released over the last weekend turned out more positive than expected and added to the confidence of the market players. Following the rate cut announced by China last week, it was widely feared that the world's second-largest economy could show a further slowdown in growth and more price pressures.
Market confidence was boosted as China's exports rose 15.3 percent in May from a year earlier, which is up from 4.9 percent in April. There were also indications that price pressures are continuing to ease in China, as the consumer price index rose 3.0 percent from a year earlier, down from 3.4 percent in April.