Asian shares rallied on Tuesday after Beijing finally convinced investors of its intent with a series of policy boosts for its struggling economy, including help for its ailing real estate sector.
China said it will focus on expanding domestic demand, boosting confidence and preventing risks, state news agency Xinhua cited the Politburo, the top decision-making body of the ruling Communist Party, as saying.
That saw Asian stocks jump and the yuan rise, with the heaviest buying in Hong Kong’s beaten-down property sector while the dollar dipped against key rivals.
While there were few details of the proposed measures, shares rose across the board, with tech giants and property developers leading the gains.
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Hong Kong-listed tech giants surged 4.6%, while mainland property developers climbed 11.3% after tumbling to around eight-month lows on Monday amid fears of a cash crunch and a lack of support from policymakers. Onshore real estate firms also rallied 6.9%.
Foreign money flowed at a rapid clip, with overseas investor buying more than net 15 billion yuan ($2.10 billion) of Chinese shares via the Stock Connect so far on the day, on course for the biggest daily inflow since end-January.
Week to date, foreign investors bought 10 billion yuan of Chinese stocks. Other sectors, including consumer staples, financials, automobiles and new energy, rose between 1.9% and 4.3%.
The Hang Seng Index surged 4.10%, or 766.25 points, to 19,434.40.
The Shanghai Composite Index rose 2.13%, or 67.36 points, to 3,231.52, while the Shenzhen Composite Index on China’s second exchange gained 2.19%, or 43.85 points, to 2,048.15.
The region’s outlier was Japan where Tokyo’s share average ended lower, with heavyweight technology stocks leading the losses, as risk appetite was sapped by caution ahead of interest rate decisions from key global central banks, including Japan’s.
The Nikkei index slipped 0.06% to end at 32,682.51, having pulled back from a drop of 0.6% earlier in the session. The broader Topix ended up 0.18% to 2,285.38.
The BoJ, whose two-day policy meeting starts on Thursday, is widely expected to keep its ultra-low rate policy intact.
But investors remember a surprising tweak in the yield curve control policy in December when the BoJ widened the trading band of the benchmark 10-year bond yield.
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Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Mumbai, Taipei, Manila and Jakarta also rose, though Wellington dipped.
MSCI’s broadest index of Asia-Pacific shares outside Japan snapped a six-day losing streak with a 1.5% gain.
China’s policy announcements set the tone across forex markets too and the dollar index, which measures the US currency against six major rivals, eased 0.1% to 101.31. The China-sensitive Australian dollar rose 0.4% to $0.6767.
A big session of earnings lies ahead, along with the release of the euro zone bank lending survey on Tuesday before the Federal Reserve takes centre stage on Wednesday.
Microsoft, Google parent Alphabet, Visa, General Electric, chipmaker Texas Instruments are among the heavyweights in the US reporting.
Markets anticipate 25-basis-point rate hikes from both the Fed and the European Central Bank this week but beyond that pricing diverges from policymakers’ rhetoric, meaning a great deal of focus will fall on their tone and outlook.
In the energy market, US crude rose 0.3% to $78.98 per barrel and Brent was at $82.96, also up 0.3% on the day. Spot gold added 0.3% to $1,961 an ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 0.06% at 32,682.51 (close)
Hong Kong – Hang Seng Index > UP 4.10% at 19,434.40 (close)
Shanghai – Composite > UP 2.13% at 3,231.52 (close)
London – FTSE 100 > UP 0.14% at 7,689.50 (0934 GMT)
New York – Dow > UP 0.52% at 35,411.24 (Monday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Chinese Yuan Surges After Beijing’s Vow of Support
China’s Politburo Vows ‘Forceful’ Policy Moves to Lift Economy
Hang Seng Hit by Property Fears, Nikkei Boosted by Weak Yen
