Asian stocks rallied on Wednesday boosted by hopes China’s long-running tech crackdown might be coming to an end after Alibaba revealed its split-up plans.
The mood was also lifted by more signs the threat of a global banking crisis was fading after the sale of more assets in collapsed lender Silicon Valley Bank.
Japan’s Nikkei share average ended at a near three-week high as investors went bargain hunting and market heavyweight SoftBank Group jumped on Alibaba Group’s breakup move.
China Tech Giants, Hong Kong Surge on Alibaba Breakup Plan
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The Nikkei index rose 1.33% to close at 27,883.78, its highest since March 10 and marking the biggest daily jump since March 22. The broader Topix rose 1.46% to 1,995.48.
SoftBank jumped 6.18% and lifted the Nikkei the most, by 62 points, after Alibaba Group announced plans to split into six units and explore fundraisings or listings for most of them. SoftBank has a stake in Alibaba.
Hong Kong stocks surged, fired by a jump in Alibaba’s shares following the internet giant’s revamp and listing plan which fuelled optimism that Beijing’s crackdown on the tech sector may be ending.
Alibaba’s plan would be the biggest restructuring of the technology conglomerate in its 24-year history. Hong Kong-listed Alibaba was up 13.2% by the lunch break, after surging as much as 16.3% in early morning trade, before closing 12.23% ahead.
The revamp also comes a day after Alibaba founder Jack Ma returned home from a year-long stay abroad, a move that dovetailed with Beijing’s effort to spur growth in the private sector after two years of crackdown.
The index heavyweight lifted the Hang Seng Tech Index by 2.7%, while also sending the Hang Seng benchmark up 2.06%, or 407.75 points, to 20,192.40.
Major internet firms Tencent, Meituan and JD.Com rose between 2% and 5%, cheered by Alibaba’s breakup plan.
China Recovery Doubts
China’s CSI 300 benchmark, meanwhile, edged up 0.2%, as investors awaited more data to gauge the country’s economic recovery after it dropped stringent zero-Covid curbs and reopened its economy.
The Shanghai Composite Index fell 0.16%, or 5.32 points, to 3,240.06, while the Shenzhen Composite Index on China’s second exchange edged down 0.05%, or 1.00 points, to 2,103.37.
Elsewhere across the region, Taipei and Bangkok rose while Sydney posted small losses. Indian stocks advanced with Mumbai’s signature Nifty 50 index up 0.41%, or 69.30 points, at 17,021.00.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.68% higher.
Globally, futures indicated European stocks were set to open higher, with Eurostoxx 50 futures up 0.41%, German DAX futures up 0.38% and FTSE futures up 0.08%. E-mini futures for the S&P 500 rose 0.48%.
Also helping sentiment was easing worries over the banking sector, with investor nerves soothed by the sale of assets in the failed Silicon Valley Bank and few signs of further stresses in the banking system following weeks of volatility in the market.
US Consumer Confidence Rises
Overnight, a survey showed that US consumer confidence unexpectedly increased in March despite recent financial market turmoil, but Americans continued to expect inflation to remain elevated over the next year.
Worries over inflation have prompted investors to recalculate what they expect the Fed to do in its next meeting in May.
Markets are now pricing in a 60% chance of the Fed standing still on interest rates in its next meeting, the CME FedWatch tool showed.
In the foreign exchange markets, the dollar index, which measures the US currency against six peers, was up 0.098%, having eased 0.3% overnight on improving risk appetite.
The Japanese yen weakened 0.63% to 131.73 per dollar, after rising 0.5% overnight.
In the commodities market, oil prices gained for a third straight day on improving market sentiment and as a halt to some exports from Iraqi Kurdistan raised concerns of tightening supply.
US crude rose 0.59% to $73.63 per barrel and Brent was at $78.83, up 0.23% on the day.
Tokyo – Nikkei 225 > UP 1.33% at 27,883.78 (close)
Hong Kong – Hang Seng Index > UP 2.06% at 20,192.40 (close)
Shanghai – Composite < DOWN 0.16% at 3,240.06 (close)
London – FTSE 100 > UP 0.73% at 7,538.74 (0934 GMT)
New York – Dow < DOWN 0.12% at 32,394.25 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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