Asia stocks higher on EU summit hopes, China easing speculation

Investing.com - Asian stock markets were broadly higher for a second day on Tuesday, continuing to recover from last week’s drop to multi-month lows as hopes for near-term easing in Chinese monetary policy boosted shares ahead of Wednesday’s summit of European leaders.

During late Asian trade, Hong Kong's Hang Seng Index rallied 1.25%, Australia’s ASX/200 Index rose 1.15%, while Japan’s Nikkei 225 Index climbed 1.1%.

Market sentiment found support after Chinese state-run newspaper China Securities Journal said that the nation plans to speed up the approval of infrastructure construction projects to boost economic growth.

The report comes a day after the newspaper said Beijing could announce stimulus measures in the near term and following weekend comments from Chinese Premier Wen Jiabo saying the country will focus more on bolstering economic growth.

Shares in Hong Kong were broadly higher on the news, with property developers and financial sector stocks leading gains.

Mainland real estate developer Evergrande Real Estate Group saw shares surge 8.1%, while China Overseas Land and Investment climbed 3.9%. In the financial sector, Industrial and Commercial Bank of China shares advanced 1.75% and China Construction Bank shares rose 1.35%.

Chinese railway shares also contributed to gains, boosted by the government’s pledge that it will allow private investment in railway projects. Hong Kong-listed China Railway Construction gained 4.25% and China Railway Group rose 4.3%.

No significant negative news out of Europe further supported the market. Focus now turns to Wednesday’s summit of European leaders in Brussels, where leaders are expected to discuss ways to keep Greece in the euro zone as well measures to promote growth in the region.

In Japan, the Nikkei continued to recover from last Friday’s four-month low, as investors returned to the market to seek cheap valuations after entering technically oversold territory.

The Nikkei is down more than 15% since hitting a one-year high on March 27, after rallying more than 19% in the first three months of the year, as China’s economic growth slowed and on renewed concern about Europe’s debt crisis.

Gains in beaten-up exporters led the market higher, with Panasonic rising 1.7% after losing 5% last week, while Sony added 1% after dropping 4.6% in the past two sessions.

Nissan saw shares rally 4.45% after the Kyodo News reported the automaker planned to triple sales in Russia by 2015, doubling its share of the market there to 10%.

Shares in Renesas Electronics surged 7.5%, recouping a portion of the previous day’s 10.3% drop, on a Yomuri Shimbun report that it plans to raise fresh capital via a share placement.  

Elsewhere, shares in Australia were higher led by strong gains in agribusiness firm Graincorp. The company rallied 8.55% after it reported better-than-expected first-half net profit and boosted its earnings guidance to a record for the full year.

Also reporting earnings, Leighton Holdings rose 3.75% after the construction firm said it expects to sell more non-core assets to boost its balance sheet, while posting a loss for the first-quarter.

Looking ahead, the outlook for European stock markets was upbeat, as investors looked ahead to a European Union summit on Wednesday amid concerns over a political impasse in Greece and fears over the financial and economic outlook.

The EURO STOXX 50 futures pointed to a gain of 0.8%, France’s CAC 40 futures added 0.5%, London’s FTSE 100 futures jumped 1.05%, while Germany's DAX futures advanced 0.7%.

Later in the day, the U.S. was to release industry data on existing home sales.