Asian stocks endured a mixed day on Wednesday as government interventions, fears over global growth and China’s Covid struggles all played a part in guiding investors’ mood.
Japan’s main index was boosted by chip and airlines stocks while there were rebounds in South Korea and Taiwan, but Hong Kong slipped as China’s economy struggles to find its feet after months of Covid disruptions.
Tokyo’s Nikkei share average bounced back, although there were losses in energy shares and persisting worries about the slowing global economy capped gains.
The Nikkei closed up 0.54% at 26,478.77, after falling 1.77% in the previous session on its worst day in a month. The broader Topix rose 0.29% to 1,888.85, clawing back some of Tuesday’s 1.64% decline.
However, worries linger about the global growth outlook amid heightened uncertainty over Europe’s energy crisis and China’s renewed struggle to control Covid-19 outbreaks with its draconian zero-Covid policies.
The market’s immediate focus is on US consumer price data due later on Wednesday, which will show how effective Federal Reserve tightening has been so far and potentially how much more may be needed.
Worries about demand sent crude oil sliding on Tuesday, making energy the Nikkei’s worst performing sector, with a 0.71% decline.
At the other end, startup investor SoftBank Group jumped 2.4%, adding an index-leading 26 points to the benchmark, as sources said it was in talks Abu Dhabi’s sovereign wealth fund for the sale of Fortress Investment Group.
Rising China Covid Cases
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.66%, snapping two straight days of losses, after having slumped to its lowest in two years the day before.
China stocks edged higher, snapping a three-session losing streak, after data showed exports in June grew at their fastest pace in five months, even as recent rising Covid cases clouded the outlook for an economic recovery.
The blue-chip CSI300 index rose 0.2% to 4,321.46, while the Shanghai Composite Index edged up 0.09% to 3,284.29 points. The Hang Seng index fell 0.22% to 20,797.95, while the China Enterprises Index lost 0.6% to 7,145.83 points.
The Shenzhen Composite Index on China’s second exchange advanced 0.93%, or 20.03 points, to 2,175.59.
China’s commercial hub of Shanghai is racing to contain dozens of new daily Covid infections, which were already causing damage to the economy and unnerving residents.
Tech giants listed in Hong Kong added 0.5%, after a slump in the two previous sessions.
Tianqi Lithium, one of the world’s top producers of lithium chemicals, fell as much as 11.4% after the company raised $1.71 billion in the city’s biggest listing so far this year. But the group’s shares rallied to close unchanged at HK$82.
Taiwan Rebound After Taipei Steps In
Elsewhere across the region, Taiwan shares rebounded after plummeting to a more than one-and-a-half-year low on Tuesday, as the government announced it would activate its T$500 billion ($16.75 billion) stock stabilisation fund to intervene in the market.
In Seoul, equities rose and the won strengthened after the Bank of Korea delivered a historic half-point interest rate hike in an expected move, as policymakers try to curb inflation that is running at the fastest pace since the bank adopted its current policy system in 1999.
Stocks in Singapore, Malaysia and the Philippines all fell, declining between 0.6% and 1.7%. Indian stocks retreated with Mumbai’s signature Nifty 50 index down 0.44%, or 70.80 points, at 15,987.50.
The dollar was also firm on its peers, and its index measure against major rivals was holding solidly at 108.27.
The US benchmark 10-year yield was 2.9724%, having traded either side of 3% for the last week.
Oil prices paused their overnight declines. Brent crude was little changed at $99.60 a barrel with US West Texas Intermediate crude at $95.89.
Leading cryptocurrency bitcoin was up 0.23% and looked on track to snap a three-day losing streak, though at $19,478.89 was still trading below the key psychological $20,000 mark.
Tokyo – Nikkei 225 > UP 0.54% at 26,478.77 (close)
Hong Kong – Hang Seng Index < DOWN 0.22% at 20,797.95 (close)
Shanghai – Composite > UP 0.09% at 3,284.29 (close)
New York – Dow < DOWN 0.62% at 30,981.33 (Tuesday close)
- Reuters with additional editing by Sean O’Meara