Asia report: Markets firmer, SoftBank soars on Arm sale

Markets in Asia finished higher on Monday, as investors watched the announcement of the successor to Japan’s retiring prime minister Shinzo Abe, and reacted to confirmation that SoftBank was selling British chipmaker Arm to Nvidia.

In Japan, the Nikkei 225 was up 0.65% at 23,559.30, as the yen strengthened 0.1% against the dollar to last trade at JPY 106.05.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.45% and fashion firm Fast Retailing was 1.62% weaker, while technology conglomerate SoftBank Group soared 8.96%.

SoftBank’s shares were surging after it confirmed it was selling UK chip designer Arm to US-based graphics hardware giant Nvidia, in a deal worth $40bn.

That would consist of $21.5bn in Nvidia stock and $12bn in cash, with $2bn of that payable at signing.

The broader Topix index was ahead 0.88% by the end of trading in Tokyo, settline at 1,651.10.

“SoftBank shares have moved sharply higher in Asia trading this morning on news of the sale, however this optimism needs to be tempered,” said CMC Markets chief market analyst Michael Hewson.

“Not least because the proposed sale has already attracted the attention of the UK government with respect to the thousands of UK jobs based in and around Cambridge, with the CMA likely to take an interest in the sale.”

On the political front in Japan, Yoshihide Suga won the Liberal Democratic Party leadership election during the day, paving the way for him to succeed Shinzo Abe as the country’s prime minister.

Abe announced his resignation last month, citing health concerns as the reason for his stepping down.

On the mainland, the Shanghai Composite rose 0.57% to 3,278.81, while the smaller, technology-heavy Shenzhen Composite added 1.15% to 2,189.10.

South Korea’s Kospi was up 0.56% at 24,640.28, while the Hang Seng Index in Hong Kong was 1.3% firmer at 2,427.91.

The blue-chip technology stocks were higher in Seoul, as sentiment in the sector strengthened on the back of the Arm-Nvidia deal, with Samsung Electronics up 2.37% and SK Hynix ahead 2.04%.

Oil prices were lower at the end of the Asian day, with Brent crude last down 1.03% at $39.42 per barrel, and West Texas Intermediate off 1.29% at $36.85.

In Australia, the S&P/ASX 200 was 0.68% higher by end-of-play in Sydney, at 5,899.50, although financial group Macquarie Group was down 4.68%.

The company had warned the market earlier in the session that it was expecting its first-half earnings to be down 35% year-on-year.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 managed gains of 0.36% to 11,790.54, as broadband infrastructure operator Chorus gained 3.86% to reach a record closing price.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.21% weaker at AUD 1.3758, while the Kiwi strengthened 0.35% to NZD 1.4958.