Asia’s major stock indexes enjoyed a largely positive day on Thursday as, in the absence of any significant cues, investors bet hard on an imminent turnaround in US interest rates.
Hopes of new stimulus out of Beijing for China’s stuttering recovery also boosted the mood across the region, along with a rally in US stocks and bonds, while the dollar fell to five-month lows.
The outlier was Japan where the Nikkei share average snapped a four-session winning run as investors sold stocks after sharp gains in the previous session, while a stronger yen against the US dollar also weighed on market sentiment.
A stronger yen tends to hurt exporter shares as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
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The Nikkei fell 0.42% to 33,539.62 after a more than 1% jump in the previous session. The broader Topix edged down 0.14% to 2,362.02.
China stocks rebounded on strong foreign inflows, with overseas investors snapping up big-cap Chinese companies as policy expectations and the market’s low valuation offered attractive opportunities.
Foreign investors had bought a net $1.59 billion of Chinese stocks via Stock Connect so far on the day, and were on course to book the biggest daily inflow in five months.
In mainland markets, new energy stocks jumped 6% to lead the gains, while shares in real estate developers, consumer staples and tourism firms rose between 2% and 3%.
The blue-chip CSI 300 Index jumped 2.34%, set to log the biggest gain in five months and the Shanghai Composite Index rose 1.38%, or 40.09 points, to 2,954.70. The Shenzhen Composite Index on China’s second exchange was ahead 2.30%, or 40.87 points, to 1,817.38.
Hong Kong’s Hang Seng Index surged 2.52%, or 418.69 points, to close at 17,043.53, while the Hang Seng China Enterprises Index climbed 2.87%.
Tech giants listed in the territory gained 2.1%, with Meituan up 4.3%. The Hang Seng Mainland Properties Index advanced 3%.
Elsewhere across the region, in earlier trade, most Asian bourses were in positive territory with Seoul, Sydney, Mumbai, Taipei, Wellington, Jakarta, Manila, Singapore and Kuala Lumpur all rising.
Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan added another 1.5%, to be up about 11% in two months and at its highest since August.
Oil Prices Subdued
At the start of the day, European shares added 0.2% to approach a 23-month high hit two weeks ago, and were on course for gains of about 13% this year.
Wall Street was set for gains, too, with S&P 500 futures up 0.1% to another record high and Nasdaq futures firming 0.2%.
The S&P 500 has climbed 14% in just two months to come within a whisker of its all-time closing peak, while its price to earnings ratio is up by a quarter on the year at 24.0.
Yields on 10-year Treasury notes stood at 3.812%, having hit a five-month low overnight. The two-year yield was down at 4.273%, having been as high as 5.295% as recently as October.
The falls weighed broadly on the US dollar and lifted the euro to its highest since July at $1.1129. The single currency was last at $1.1115, having gained 2% so far this month to within sight of its 2023 top of $1.1276.
The dollar index, which measures the US currency against six rivals, fell to a fresh five-month low of 100.76. The index is on course for a 2.6% decline this year, snapping two straight years of strong gains.
The dollar also lost ground to the yen at 140.995 yen, having shed 4.7% for the month so far. It is still up sharply for the year as the Bank of Japan takes a glacial approach to tightening its super-easy policies.
Oil prices, which slid on Wednesday, remained subdued as concerns over supplies eased after major shippers announced they would return to the Red Sea.
Brent edged up 10 cents to $79.85 a barrel, while US crude fell 5 cents to $74.14 per barrel.
Key figures
Tokyo – Nikkei 225 < DOWN 0.42% at 33,539.62 (close)
Hong Kong – Hang Seng Index > UP 2.52% at 17,043.53 (close)
Shanghai – Composite > UP 1.38% at 2,954.70 (close)
London – FTSE 100 < DOWN 0.03% at 7,722.84 (0934 GMT)
New York – Dow > UP 0.30% at 37,656.52 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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