Asian stocks saw a mixed session on Wednesday with China’s bid to turn around its struggling economy the main cue for investors.
While mainland China and Hong Kong stocks enjoyed a second-day bump after China’s central bank cut bank reserves and reduced mortgage rates, doubts about the moves’ likely success distracted investors elsewhere.
Japan’s Nikkei share average edged down in choppy trade, buoyed by Wall Street strength overnight before profit-taking and China fears trumped the gains as investors awaited fresh drivers.
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The Nikkei share average edged down 0.19%, or 70.33 points, to close at 37,870.26, while the broader Topix dropped 0.23%, or 6.23 points, to 2,650.50.
Machinery was up 2.5% to lead gains among the Tokyo Stock Exchange’s 33 industry groups.
Chinese stocks saw gains though, continuing a stimulus-driven rally for the second consecutive day.
The People’s Bank of China followed its announcement of wide-ranging policy easing on Tuesday with a cut to medium-term lending rates to banks on Wednesday. Beijing’s broad-based stimulus – the biggest since the pandemic -– also included steps to boost China’s stock market and support for the ailing property sector.
China’s blue chip CSI 300 index advanced 1.48% while the Shanghai Composite Index rose 1.16%, or 33.18 points, to 2,896.31. The Shenzhen Composite Index on China’s second exchange advanced 1.24%, or 19.30 points, to 1,575.28.
The Hang Seng Index gained 0.68%, or 128.54 points, to 19,129.10, adding to Tuesday’s 4.1% surge.
China’s strong performances briefly lifted other regional indexes before they faltered. Taipei also advanced but worries that a lot more work was needed to help the Chinese economy bounce back weighed on sentiment elsewhere.
Sydney, Seoul, Singapore, Wellington, Bangkok, Manila and Jakarta all fell, while Mumbai gained. MSCI’s broadest index of Asia-Pacific shares outside Japan was, however, 0.9% higher.
Japan’s Yen Steady
In currency, China’s yuan strengthened to a fresh 16-month high, briefly crossing the key 7-per-dollar level in offshore trading, before retreating to be flat at 7.0126 per dollar.
The yen was steady at 143.23 per dollar, after earlier flipping between moderate gains and losses.
Overall, the dollar stayed on the back foot. The euro added 0.14% to $1.11945 after earlier pushing as far as $1.1199 for the first time since August 26. Sterling edged up to $1.34165, and earlier reached a fresh high since March 2022 at $1.3430.
Meanwhile, Australia’s dollar initially scaled its highest since February of last year at $0.6908 but then slipped back to sit at $0.68935 after inflation figures showed some cooling, potentially setting up an earlier rate cut by the central bank.
Overnight, data showed US consumer confidence unexpectedly fell to 98.7 this month from an upwardly revised 105.6 in August. The decline was the largest since August 2021.
The odds on another 50-basis point Fed rate cut at the November meeting jumped to 60.4% from 53% a day earlier, according to the CME Group’s FedWatch Tool.
Gold rose 0.08% to $2,658.80 per ounce, and earlier marked a new record peak at $2,670.43.
Brent crude futures slipped 13 cents to $75.04 a barrel, but remained close to Tuesday’s high of $75.87, a level previously not seen since September 3.
Key figures
Tokyo – Nikkei 225 < DOWN 0.19% at 37,870.26 (close)
Hong Kong – Hang Seng Index > UP 0.68% at 19,129.10 (close)
Shanghai – Composite > UP 1.16% at 2,896.31 (close)
London – FTSE 100 > UP 0.08% at 8,289.10 (0933 BST)
New York – Dow > UP 0.20% at 42,208.22 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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