Asian shares advance, with Japan's benchmark surging after ruling party forms new coalition

Audio By Carbonatix

BANGKOK (AP) — Asian markets surged Monday after Wall Street finished a winning week, overcoming worries over bank lending and the trade war with China.

U.S. futures edged higher while oil prices fell.

Japan’s benchmark Nikkei 225 jumped 2.9%, to 48,970.40, setting a new record, after its governing Liberal Democrats found a new coalition partner, securing support for its leader Sanae Takaichi to become the country’s first female prime minister.

Takaichi is expected to push for market-supporting policies such as low interest rates and higher government spending.

China reported its economy grew at a 4.8% annual pace in the last quarter, supported by relatively strong exports as companies increased shipments markets other than the U.S.

Still, it was the slowest pace in a year. The world's second largest economy is still struggling to emerge from a prolonged downturn in its property market and to encourage consumers and businesses to spend more.

China's ruling Commumist Party leadership convened a meeting Monday in Beijing that is expected to set policy goals for the coming five years and also tackle personnel changes.

The outcome of the closed door meeting this week will likely emerge gradually and be formally endorsed at the annual session of the national legislature in early March.

Hong Kong's Hang Seng advanced 2.5% to 25,884.81, while the Shanghai Composite index added 0.7% to 3,866.77.

In South Korea, the Kospi surged 1.3% to 3,796.64, setting another record on hopes for a trade deal with Washington and strong demand for semiconductors. SK Hynix gained 3.3% while automakers Kia Corp. rose 2.7% and Hyundai Motor Co. climbed 2.5%.

Australia's S&P/ASX 200 rose 0.2% to 9,009.10.

On Friday, U.S. stocks cruised higher after banks recovered some of their sharp losses from the day before.

The S&P 500 rose 0.5% to 6,664.01. The Dow Jones Industrial Average added 0.5% to 46,190.61 and the Nasdaq composite climbed 0.5% to 22,679.97.

It was the best week for the S&P 500 since early August,.

Some of the nervousness around U.S.-China trade tensions eased on Friday after President Donald Trump said that very high tariffs he threatened to put on Chinese imports are not sustainable.

Trump also told Fox News Channel’s “Sunday Morning Futures” that he would meet with China’s leader, Xi Jinping, at an upcoming conference in South Korea. That's counter to an earlier, angry posting he made on social media, where he said there seemed to be “no reason” for such a meeting.

Bank stocks, meanwhile, stabilized on Friday after several reported stronger profit for the latest quarter than analysts expected, including Truist Financial, Fifth Third Bancorp and Huntington Bancshares.

Zions Bancorp., which is charging off $50 million of loans where it found “apparent misrepresentations and contractual defaults” by the borrowers, climbed 5.8% following a 13.1% loss on Thursday.

Western Alliance Bancorp, which is suing a borrower due to allegations of fraud, rose 3.1% after a 10.8% fall on Thursday.

The quality of loans that banks and other lenders have made is under scruntiny following last month’s Chapter 11 bankruptcy protection filing of First Brands Group, a supplier of aftermarket auto parts.

The question is whether the lenders’ problems are just a collection of one-offs or a signal of something larger threatening the industry. Uncertainty is high following a long stretch where many borrowers were able to stay in business, even with the weight of higher interest rates. And with prices soaring to records for all kinds of investments, the appetite for risk may have gotten too high.

JPMorgan CEO Jamie Dimon addressed the issue on an earnings conference call with analysts earlier this week.

“When you see one cockroach, there are probably more,” Dimon said. “Everyone should be forewarned on this one.”

In other dealings early Monday, U.S. benchmark crude oil lost 19 cents to $56.96 a barrel. Brent crude, the international standard, also gave up 19 cents, to $61.10 a barrel.

The U.S. dollar rose to 150.87 Japanese yen from 150.59 yen. The euro climbed to $1.1667 from $1.1651.