Asia stocks broadly higher on EU deal; Nikkei up 1.4%

Investing.com – Asian stock markets were broadly higher on Monday, as shares in the financial sector performed strongly after a crucial summit of European Union leaders concluded with an agreement to introduce tighter fiscal controls across the single currency bloc.

During late Asian trade, Hong Kong's Hang Seng Index edged 0.15% higher, Australia’s S&P/ASX200 rose 1.2%, while Japan’s Nikkei 225 Index gained 1.4%.

A two-day summit of 27 European leaders ended on Friday with an agreement to tighten anti-deficit rules and increase the financial backstops to countries with debt problems by channeling EUR200 billion of funds to the International Monetary Fund.

Shares in the financial sector led gains in Japan. Investment banks Nomura Holdings and Daiwa Securities, which have large exposure to European sovereign debt, jumped 3.5% and 1.2% respectively, while the nation’s largest lender Mitsubishi UFJ Financial Group rose 1.75%.

Japanese exporters were broadly higher after the University of Michigan said Friday that a preliminary reading of its U.S. consumer sentiment index rose to a six-month high in November.

Consumer electronics giant Sony saw shares gain 1.3%, digital camera maker Canon climbed 1.6%, while Nissan shares advanced 1.45%.

Shares in Toyota bucked the trend however, dropping 0.7% after downgrading its full-year earnings forecast due to a strong yen and massive flooding in Thailand that disrupted production.

Elsewhere, in Hong Kong, shares in lenders led gains, amid speculation China will loosen monetary policy in the near-term after official data showed that Chinese consumer price inflation rose by 4.2% in November, the smallest gain in 14 months and easing sharply from 5.5% in the preceding month. 

Industrial and Commercial Bank of China saw shares climb 1.3%, while Hong Kong-listed shares of Bank of China and HSBC Holdings rose 1.1% and 0.9% respectively.

Losses for property developers limited gains, with Sun Hung Kai Properties dropping 2.1%, Sino Land Company retreating 1% and property investment firm China Overseas Land & Investment falling 1.45%.
 
Meanwhile, the outlook for European stock markets was downbeat as optimism over Europe’s debt deal faded and amid speculation over a possible downgrade of the euro zone’s sovereign debt by Standard &Poor’s.

 The EURO STOXX 50 futures pointed to a loss of 1%, France’s CAC 40 futures dropped 0.9%, the FTSE 100 futures shed 0.4%, while Germany's DAX futures retreated 0.8%.

Later in the day, the U.S. was to release official data on its federal budget balance.