Asia stocks bounce back as Cyprus fears ease; Nikkei ends up 2%

Investing.com - Asian stock markets bounced back from the previous day’s sell-off on Tuesday, with shares in Japan outperforming the region as the yen weakened on the back of receding concerns a controversial bailout deal for Cyprus could destabilize financial markets.

During late Asian trade, Hong Kong's Hang Seng Index rose 0.2%, Australia’s ASX/200 Index ended 0.5% lower, while Japan’s Nikkei 225 Index closed up 2% after plunging 2.7% on Monday.

Market sentiment stabilized following reports that the government in Cyprus was preparing a new deposit tax proposal to lessen the impact on smaller depositors.

The parliament in Cyprus was to vote on whether to approve the tax proposal later in the day.

Asian markets ended with heavy losses on Monday as appetite for riskier assets weakened broadly following news that a one-time tax was to be imposed on bank deposit holders as part of a EUR10 billion bailout deal for Cyprus.

In Tokyo, the Nikkei rebounded from its biggest one-day loss since May as the yen weakened against the U.S. dollar, boosting exporters.

A weaker yen increases the value of overseas income at Japanese companies when repatriated, boosting the outlook for export earnings.
 
Automakers Mazda and Honda jumped 5.6% and 2.5% respectively, while Sony and Canon rallied 6.8% and 3.1%.

Japanese megabanks were also higher, with stocks of the nation’s largest lender Mitsubishi UFJ Financial Group rising 1.8%, while Sumitomo Mitsui Financial Group and Mizuho Financial Group added 1.7% and 1.5% respectively.

The benchmark index has rallied nearly 18% since the start of the year to hit the highest level since September 2008 earlier in the month, as expectations for more aggressive monetary stimulus from the Bank of Japan under new chief Hirahiko Kuroda underpinned sentiment.

Meanwhile, in Hong Kong, the Hang Seng eased up to come off the previous session’s three-month closing low, but gains were limited as market players remained concerned over the economic outlook for China, the world’s second largest economy.

China Resources Power Holdings saw shares surge 8.7% after reporting a 68% increase in 2012 net profit from the previous year.

Also in earning news, Samsonite International saw shares climb 4.5% after posting stronger-than-expected results.

Index heavyweight HSBC Holdings also provided support, up 0.6%. Shares of HSBC command a 15% weighting on the Hong Kong benchmark, making it the single largest constituent on the index.

Elsewhere, in Australia, the benchmark ASX/200 Index ended close to a one-month low amid concerns over the global economy.

In earnings news, Australia's largest internet services provider TPG Telecommunications saw shares climb 4.9% after reporting a 41% increase in 2012 net profit.

Looking ahead, European stock market futures pointed to a steady open, as concerns over a bailout deal for Cyprus remained in focus.

The EURO STOXX 50 futures pointed to a gain of 0.1% at the open, France’s CAC 40 futures dipped 0.1%, London’s FTSE 100 futures pointed to a flat open, while Germany's DAX futures pointed to a decline of 0.1% at the open.

The ZEW Institute was to release its closely watched index of German economic sentiment later Tuesday, while the U.S. was to release official data on building permits and housing starts.