Japan and most Asian markets rise after Wall Street rally

Most Asian stock markets rose on Wednesday with Chinese and Hong Kong shares in positive territory, while Japan’s Nikkei finished above 29,000 for the first time in seven months after a rally on Wall Street.

Markets in Taiwan and Australia also rose, but shares fell in South Korea. The MSCI Asia-Pacific ex-Japan index gained 0.3%.

In China, some key indexes hit multi-week highs, driven by gains among developers who are increasingly hopeful that the Chinese government will put in place support measures to prop up the struggling real estate sector.

At the close, the benchmark Shanghai Composite climbed 0.5% to record the highest closing price since July 20, while the blue chip CSI 300 index rose 0.9%, the highest close since July 28.

In Hong Kong, the benchmark Hang Seng Index rose 0.5%, while Hong Kong-listed Chinese H-shares gained 0.4%.

The real estate sector was among the main winners after sources said China would underwrite new onshore bond issues by a few selected private developers to support its struggling real estate sector, while the state planner said that would stimulate economic demand and accelerate infrastructure projects.

The CSI housing index jumped 3.5%. However, Hong Kong-listed Chinese developers gave up all their intraday gains to cut 0.24% by the end of the session, as some analysts and economists said policy support was far from sufficient.

“The policy response to the deterioration of the real estate sector may be too slow and uncoordinated in the run-up to the policy reshuffle which only takes place once every ten years,” said Lu Ting, chief economist for China. at Nomura.

“The credit support that Chinese regulators plan to provide to some developers could help, although it is far from a complete solution to the real estate sector’s big problems.”

Separately, Premier Li Keqiang pledged that China would step up macroeconomic policy support for the economy, after a series of key economic indicators, including loan data and activity indicators, showed an unexpected slowdown in growth last month.

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Nikkei finishes around 29,000

The Japanese Nikkei ended Wednesday above the key psychological level of 29,000 for the first time in more than seven months, after Wall Street’s overnight rally in major indexes following strong profits from U.S. retailers.

The Nikkei Stock Average rose 1.23% to 29,222.77, its highest close since Jan. 5. The broader Topix rose 1.3% to 2,006.99.

“Strong US equities boosted investor sentiment,” said Takatoshi Itoshima, strategist at Pictet Asset Management Japan.

The Dow and S&P 500 rose on Tuesday as stronger-than-expected earnings and outlooks from Walmart and Home Depot bolstered consumer health sentiment, while tech stocks slumped and weighed on the Nasdaq.

Uniqlo clothing store owner Fast Retailing was the biggest mover in the Nikkei, up 2.8%, followed by air conditioner maker Daikin Industries, up 2% and telephone company KDDI, in 1.4% increase.

Tokyo Electric Power Holdings added 3.66% on expectations for a restart of nuclear power plants after a report that the nuclear authority approved the establishment of anti-terrorism facilities at a nuclear power plant, a market participant said.

Korean stocks fall from a two-month high

South Korean stocks fell on Wednesday, underperforming their Asian counterparts, as automakers slumped and investors posted profits ahead of the minutes of the U.S. Federal Reserve meeting. The Korean won weakened, while benchmark bond yields rose.

The benchmark KOSPI index ended down 17.05 points, or 0.7%, at 2,516.47, after rising for three sessions to its highest level since mid-June.

Among the heavyweights, tech giant Samsung Electronics fell 1% but peer SK Hynix rose 0.4%.

Hyundai Motor and Kia Corp had their worst day since late June, down 3.8% and 4%, respectively, after US President Joe Biden signed legislation that cut tax credits for electric vehicles ( VE) assembled outside of North America.

Electric vehicle battery makers LG Energy Solution fell 1.5% and Samsung SDI 0.5%, but SK Innovation jumped 3.2%.

ASX rises after weak payroll data

Australian stocks edged higher on Wednesday after the country’s wage data missed estimates, arguing for the Reserve Bank of Australia to rein in the pace of rate hikes, even as the giant’s poor annual results CSL biotech capped gains.

The S&P/ASX 200 Index rose 0.3% to 7,127.70. The benchmark index rose 0.6% on Tuesday.

Figures from the Australian Bureau of Statistics showed the wage price index rose 0.7% in the June quarter as strong demand for labor drove unemployment to generational lows. The data, however, missed expectations of a 0.8% increase, leading the market to raise the odds of another half-point rate hike in September.

Domestic mining stocks rose 0.4% on strength in base metal prices. Sector majors BHP Group and Rio Tinto both rose 0.8%.

Indian stocks hit four-month high

Indian stocks closed higher on Wednesday as investors pinned their hopes on strong earnings data amid signs of slowing inflation, sending the S&P BSE Sensex above the key 60,000 level for the first time since April 5.

The NSE Nifty 50 Index closed nearly 0.7% higher at 17,944.25 while the Sensex ended 0.7% higher at 60,260.13. Both indexes hit their highest closing level in four months.

A slowdown in inflation has raised expectations that the Reserve Bank of India may slow the pace and quantum of rate hikes in the coming months.

Analysts say domestic sentiment is bullish since strong corporate results in the June quarter and with signs of slowing inflation, helped by lower commodity prices.

Foreign institutional investors have also pumped money into Indian stocks, having bought $2.83 billion worth of shares this month through August 12, compared with an inflow of $618 million throughout July, according to the data.

Oil at six-month low

Oil hit a six-month low on Wednesday after a brief rally as concerns over the prospect of a global recession weakening demand overshadowed a report showing falling U.S. crude and gasoline inventories.

Wednesday’s figures did little to improve the economic picture, showing that UK consumer price inflation jumped to 10.1% in July, its highest since February 1982, intensifying pressure on households.

Brent crude fell to $91.51, the lowest since February, and as of 0931 GMT was down 5 cents to $92.29. U.S. West Texas Intermediate (WTI) crude fell 20 cents, or 0.2%, to $86.33.

“The oil market is struggling to shake off recession fears, and there’s no sign of that changing any time soon,” said Stephen Brennock of oil broker PVM.

  • Reuters with additional editing by Jim Pollard


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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd newspapers in Sydney, Perth, London and Melbourne before touring South East Asia in the late 1990s. leader of The Nation for over 17 years and has a family in Bangkok.