Asia’s major stock markets continued their advance on Thursday, with further signals from US Fed officials that their punishing rates push might finally be over boosting investor mood.
The rollout of more stimulus measures from Beijing to jumpstart its markets back into life were also welcomed by traders, while bargain-buying lifted indexes across the region too.
That was particularly true for Japan’s Nikkei share average, which jumped as investors scooped up beaten-down stocks following heavy sell-offs, with chip-related shares leading the charge.
Also on AF: Hong Kong Battles to Boost Appeal, Business After Clampdown
The Nikkei index rose 1.75% to 32,494.66, its highest close since September 25, as it posted its third consecutive session of gains. The broader Topix rose 1.50% to 2,342.49.
Japan’s chip-making equipment maker Tokyo Electron rose 2.94% to become the biggest boost for the Nikkei, followed by chip-testing making equipment maker Advantest, which jumped 4.03%.
Samsung Electronics on Wednesday said its preliminary third-quarter profit dropped by a smaller-than-expected 78%, as the battered memory chip market shows early signs of recovering from a severe downturn.
Chinese shares rose sharply after a state fund increased its stakes in the country’s biggest banks following a slew of stimulus measures to revive a flagging stock market.
China’s ‘Big Four’ state banks said late on Wednesday that their controlling shareholder Central Huijin Investment had bought their Shanghai-traded shares and plans to further increase its holdings in the next six months.
The measures came after China’s blue-chip CSI300 index fell to an 11-month low this week, despite a slew of supportive measures from the government and signs that a shaky economic recovery is gradually stabilising.
China’s blue-chip CSI300 gained 0.95%, while the Shanghai Composite Index rose 0.94%, or 28.95 points, to 3,107.90. The Shenzhen Composite Index on China’s second exchange edged up 0.72%, or 13.72 points, to 1,920.57.
Shares of banks climbed 1.7%, while insurers added 3.2%. New energy companies and automobile firms advanced 2.5% and 3.9%, respectively.
Warming Sino-US Relations
Meanwhile, tech giants listed in Hong Kong rose 1.6%, while the benchmark Hang Seng Index advanced 1.93%, or 345.11 points, to 18,238.21.
Market sentiment was also boosted by signs of an improvement in Sino-US relations. The United States said it had accepted an invitation to attend China’s top annual security forum in late October, the latest sign of potentially warming ties between the two countries’ militaries.
China, however, also issued a notice prohibiting domestic brokerages and their overseas units from taking on new mainland clients for offshore trading, which will restrict capital outflows, Reuters reported on Thursday.
Elsewhere across the region, in earlier trade, Seoul was up more than 1%, while Sydney, Singapore, Manila, Taipei and Jakarta were also on the front foot but Mumbai edged down. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.9% to the highest level in three weeks.
Europe was set to extend the rally, with Eurostoxx 50 futures up 0.3% and FTSE futures rising 0.4%. S&P 500 futures and Nasdaq futures were 0.3% higher.
Overnight, Wall Street closed higher after Fed minutes showed a growing sense of uncertainty around the path of the US economy, with volatile data and tightening financial markets posing risks to growth and leading policymakers to extend a rate pause last month.
The dollar drifted near a two-week low, but the yen was still under pressure at 149.09 per dollar, just a whisker away from the 150 level that could spur intervention from Japanese authorities.
Fed Pivot in Sight
Markets moved to further trim the chance of a Fed hike in November to just 9%, down from 13.2% a day earlier, and there is a 70% chance that the rate is already at its peak, according to the CME FedWatch Tool.
With the long-awaited pivot for the Fed in sight, traders are bracing for the all-important US consumer inflation report due later on Thursday. Stakes are higher because a producer price inflation report came in hotter than expected on Wednesday.
Long-dated treasury yields eased for a third straight session, also benefiting from some safe-haven demand from the ongoing conflict in the Middle East.
Ten-year yields eased 3 basis points to 4.5706% on Thursday, off from a 16-year high of 4.8870%.
Oil prices extended their declines on Thursday after top OPEC producer Saudi Arabia pledged to help stabilise the market amid fears of supply disruption from the conflict between Israel and Palestinian Islamist group Hamas.
Brent futures eased 0.3% to $85.56 a barrel after a 2% drop in the prior session. US West Texas Intermediate crude fell 0.5% to $83.08, following a 2.9% plunge on Wednesday.
Spot gold was 0.3% higher at $1,878.98 per ounce, about the highest in two weeks.
Key figures
Tokyo – Nikkei 225 > UP 1.75% at 32,494.66 (close)
Hong Kong – Hang Seng Index > UP 1.93% at 18,238.21 (close)
Shanghai – Composite > UP 0.94% at 3,107.90 (close)
London – FTSE 100 > UP 0.59% at 7,665.25 (0925 BST)
New York – Dow > UP 0.19% at 33,804.87 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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