Asia stocks rally on Cyprus bailout deal; Nikkei jumps 1.7%

Investing.com - Asian stock markets were higher during late Asian trade on Monday, as news that Cyprus and its international lenders reached a last-minute bailout agreement boosted appetite for riskier assets.

During late Asian trade, Hong Kong's Hang Seng Index was up 0.7%, Australia’s ASX/200 Index ended 0.5% higher, while Japan’s Nikkei 225 Index rallied 1.7% after tumbling 2.5% on Friday.

European finance ministers approved a EUR10 billion bailout plan for Cyprus just hours before a deadline, easing fears over a collapse of the island’s banking sector.

The European Central Bank said last week that it will cut off liquidity to Cypriot banks on Monday if an agreement with the European Union and the International Monetary Fund on a bailout solution is not in place.

Under the bailout deal, the island's second largest bank, Laiki Bank, will be restructured and holders of bank deposits of more than EUR100,000 will be subject to significant losses.

Depositors holding less than EUR100,000 in their bank accounts will be protected from any deposit taxes.

A previous bailout proposal that included a levy on all deposits in Cypriot banks was rejected by the country's parliament last week, sparking fears the island could leave the euro zone.

In Tokyo, the Nikkei recouped most of the previous session’s losses as demand for the safe-haven yen weakened following the Cyprus news.

A weaker yen increases the value of overseas income at Japanese companies when repatriated, boosting the outlook for export earnings.
 
Sony and Nikon saw shares gain 3.1% and 1.9% respectively, while Toyota shares added 0.8%.

Japanese financial firms were also higher, with shares of the nation’s largest lender Mitsubishi UFJ Financial Group rising 1.6%, while brokerage firms Aiful and Orient surged 11.5% and 9% respectively.

Meanwhile, in Hong Kong, the Hang Seng traded higher as investors bought up shares of Chinese financial sector stocks, following upbeat earnings from China Construction Bank.

CCB saw shares gain 2.3% after the lender reported a 14% increase in 2012 profit.

The strong earnings beat boosted demand for other shares in the sector, with Industrial and Commercial Bank of China climbing 1.3%, while Bank of China added 1%.

Elsewhere, in Australia, the benchmark ASX/200 Index inched higher as miners and lenders led gains.

Mining giants Rio Tinto and BHP Billiton rose 1.5% and 1% respectively, while iron ore maker Fortescue Metals Group jumped 1.9%.

In the financial sector, ANZ Banking Group saw shares climb 1.5%, while Westpac Banking Group tacked on 1.9%.

Looking ahead, European stock market futures pointed to a higher open, after European Union finance ministers approved a bailout agreement for Cyprus.

The EURO STOXX 50 futures pointed to a gain of 0.6% at the open, France’s CAC 40 futures added 0.6%, London’s FTSE 100 futures eased up 0.5%, while Germany's DAX futures pointed to a gain of 0.5% at the open.