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Asia: Cyprus deal galvanizes the bulls

Anastasia Tretyakova, Junior analyst, Global Markets (Finam)

On Monday, March 25, Asian equities closed broadly positive as Cyprus struck a deal with the troika of international lenders in Brussels on Sunday night, paving the way for EUR 10 bn (USD 13 bn) of emergency loans to be unlocked.

On top of that, the parties reached an accord on revamping Cyprus second-biggest lender Laiki through splitting it into a “good” bank and a “bad” bank, with the latter to be shuttered over time. The media wired that deposits below EUR 100,000 on the bank’s account would be transferred to the Bank of Cyprus.

Markets also got a boost by robust financials from Asia’s leading petroleum refiner Sinopec and Singapore’s consumer price index, which grew 4.9% y-o-y in February, vs. the median projection of 4.10% y-o-y.

As for the indexes, the regional measure MSCI Asia Pacific firmed 0.9% to settle at 135.45. China’s CSI 300 dipped 0.20%, while Hong Kong’s Hang Seng, Australia’s S&P/ASX 200, Japan’s Nikkei 225, and South Korea’s Kospi advanced 0.61%, 0.46%, 1.69% and 1.49%, respectively.

In other news, Japan’s consumer electronics manufacturer Sony added 3.1% to its market cap, while shares of the world’s leading car maker Toyota Motor gained 0.8%, as the yen softened against the US dollar and the euro. Asia’s biggest petroleum refiner China Petroleum & Chemical Corp (Sinopec) jumped 2.7%, after the company reported stronger-than-expected FY profit.

China Construction Bank, the globe’s second-biggest lender by market cap, surged 2.3%, as its Q4 profit outpaced market expectations due to improved lending revenue.

Australia’s largest constructor Leighton Holdings spiked 4.3%, after Bob Humphris, a former Managing Director at Peabody Energy (US biggest coalminer) local division and head of Australian Infrastructure Fund, took over as Chairman of the BoD.