Asia markets close higher on China inflation data

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By 2017-10-17

Most major Asian indexes closed higher on Monday, following the stronger lead from Wall Street, as investors digested the release of China inflation data.

Japan's Nikkei 225 climbed for a tenth straight day, extending gains once more to touch a fresh 21-year high. The index was up 0.47 per cent, or 100.38 points, to close at 21,255.56. Ahead, politics will be in focus for Japanese markets as the country gears up for lower house election at the end of the week.

Across the Korean Strait, the Kospi closed up 0.26 per cent at 2,480.05 as steelmakers and cosmetics retailers notched gains: Posco jumped 5.85 per cent, Hyundai Steel closed up 2.39 per cent and Amorepacific soared 5.17 per cent. Tech stocks were mixed, with SK Hynix falling 2.21 per cent, but LG Electronics climbing 0.9 per cent.

Down Under, the S&P/ASX 200 rose 0.56 per cent to finish the session at 5,846.8, with the materials sub-index rising 1.55 per cent and leading gains on the broader index. Major miners surged: Rio Tinto closed up 3.43 per cent, Fortescue Metals climbed 1.02 per cent and BHP jumped 2.24 per cent.
Elsewhere, China is likely to be in the spotlight this week as the 19th National Congress of the Communist Party China kicks off on on 18 Octber.
Mainland markets were mixed: The Shanghai Composite reversed gains to edge down 0.35 per cent to close at 3,378.8045 and the Shenzhen Composite fell 1.515 per cent to end at 2,005.9458. Hong Kong›s Hang Seng Index, meanwhile, soared 0.66 per cent by 3:10 p.m. HK/SIN.
Investors in the region also digested inflation data out of the world's second-largest economy: China's consumer price index rose 1.6 per cent in September from a year ago, meeting expectations. The producer price index rose 6.9 per cent in the same period — well above the 6.3 per cent forecast in a Reuters poll.

US Federal Reserve Chair Janet Yellen appeared positive on the inflation outlook in the months ahead in a Sunday speech, Reuters said. Yellen indicated that inflation was likely to improve despite the unexpectedly low levels seen this year.
"While the Fed may well get one more hike in December, if goods inflation fails to show up next year, there might not be too many more in a hurry," Joanne Masters, senior economist at ANZ, said in a note.

In individual stocks, SoftBank Group was up 1.44 per cent. The spike in share price came after news that T-Mobile and SoftBank-controlled Sprint intended to announce a merger, according to Reuters. That followed a report from Nikkei Asian Review during the weekend that SoftBank had 'reached a broad agreement» about the deal.

Also in Japan, shares of Kobe Steel closed 2.73 per cent higher after trading near their lowest level in five years earlier in the session. The steelmaker is currently embroiled in a data falsification scandal. On Friday, the company›s chief executive acknowledged that around 500 firms had received affected products, Reuters reported.

Over in South Korea, Samsung Electronics were flat after the company announced Friday that it was expecting record profit for the third quarter. Other tech stocks in the market were mixed: LG Electronics rose 0.9 per cent, LG Display added 2.24 per cent and Samsung SDI fell 6.71 per cent.

Oil built on Friday›s gains following news that Iraqi forces had captured parts of Kirkuk, a Kurdish-controlled oil-rich province, Reuters said, citing local media. The Iran nuclear deal was also in focus after President Donald Trump's decision not to certify that Tehran was in compliance with obligations that were part of the agreement.
Global benchmark Brent crude spiked 1.45 per cent to trade at $58.00 a barrel and US West Texas Intermediate advanced 1.32 per cent to $52.13.

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