Asian shares rallied on Thursday, with investor mood buoyed by Beijing’s rollout of support measures for its stuttering economy.
China’s markets surged for a third straight session as investor confidence was revived, while Japanese bonds fell in anticipation of a policy shift and currency markets were steady ahead of a European Central Bank meeting.
China’s mainland markets saw their largest daily gain in nearly two years and the blue-chip CSI 300 index rose 2.01%. Property developers, infrastructure firms and state-owned enterprise shares led the way.
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The Shanghai Composite Index rose 3.03%, or 85.34 points, to 2,906.11, while the Shenzhen Composite Index on China’s second exchange advanced 2.62%, or 43.12 points, to 1,689.98.
The Hang Seng Index gained 1.96%, or 312.09 points, to 16,211.96.
But all China’s indexes remain down for the year on investors’ frustration at the lack of a large-scale response from Beijing to China’s economic slowdown, though Wednesday’s cut to bank reserve requirements has now partially raised expectations.
Japan’s Nikkei share average erased early losses to end flat, supported by advances in chip-related stocks tracking record gains overnight in Wall Street peers.
The Nikkei ended 0.03% higher to 36,236.47, after falling as much as 0.9% earlier in the session. The broader Topix also changed course to close 0.11% higher at 2,531.92.
The Nikkei has risen more than 8% so far this month, hitting fresh 34-year highs several times, driven by the Bank of Japan’s ultra-loose monetary policy, Wall Street’s strong performance and a weaker yen.
Chip-related shares tracked the Philadelphia SE semiconductor index’s gain to a record high overnight. Tokyo Electron rose 0.99% and Lasertec jumped 4.14%. Advantest gained 1.2%.
Elsewhere, South Korea beat expectations for growth in the fourth quarter of 2023, and the Kospi edged ahead while the won was steady. Traders sold shares in chipmaker SK Hynix despite it turning a surprise quarterly profit.
Indian stocks retreated with Mumbai’s signature Nifty 50 index down 0.35%, or 75.90 points, to close at 21,378.05. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7%.
ECB Rates Wait
In currency markets, the dollar has bounced from its lows after a survey showed US business activity picking up in January.
Global bond markets have meanwhile been under pressure as traders pare back expectations for rate cuts. European Central Bank policymakers will likely try to pour further cold water on market pricing at the post-meeting press conference.
The ECB is expected to leave rates on hold at Thursday’s meeting. The euro was steady at $1.0878. The yen held on the strong side of 148 per dollar after hints at rate rises in Japan triggered selling in the Japanese government bond market.
Ten-year Japanese government bond yields posted their sharpest rise in seven weeks on Wednesday and rose a further 3.5 bps to 0.74% on Thursday.
Wednesday’s strong activity data drove two-year US Treasury yields from lows overnight and they were steady at 4.37% in Asia.
Interest rate futures price about a 40% chance of a US rate cut in March, down from 75% in December. US GDP data is due later in the session and investors say indicators will need to sour markedly, and soon, to justify wagers on such cuts.
Key figures
Tokyo – Nikkei 225 > UP 0.03% at 36,236.47 (close)
Hong Kong – Hang Seng Index > UP 1.96% at 16,211.96 (close)
Shanghai – Composite > UP 3.03% at 2,906.11 (close)
London – FTSE 100 > UP 0.03% at 7,530.13 (0934 GMT)
New York – Dow < DOWN 0.26% at 37,806.39 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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