The MLB store in the Myeongdong shopping district in Seoul, South Korea, on Saturday, March 9, 2024.
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SINGAPORE – Hong Kong Hang Seng Index trading more than 6% higher Wednesday after returning from a public holiday on Tuesday, signaling more optimism about Beijing’s stimulus policy.
make Property fuel results, with China Vanke, The Logan Group and Longfor Group leading, up over 40%, 32% and 23%, respectively.
Chinese tech giants were also rallying, with Baidu and JD.com both up by over 10%. Alibaba, Tencent and Xiaomi all were up over 5%.
Markets in mainland China were closed on Wednesday and will remain closed for the rest of the week due to the Golden Week holiday. Chinese stocks rallied Monday to their best day in 16 years after Beijing announced a raft of stimulus measures last week, including cutting interest rates, cutting reserve requirements for banks and providing more liquidity to investors.
Overall, Asia-Pacific markets were mixed on Wednesday morning, after a poor start to the trading month on Wall Street that saw major indexes fall amid Middle East tensions.
Australia’s S&P/ASX 200 traded even. South Korea’s Kospi fell 0.2%, while the small-cap Kosdaq rose 0.6%. Japan’s Nikkei 225 fell 1.6%, while the Topix fell 0.8%.
On Tuesday, Japan’s new Prime Minister Shigeru Ishiba took office after his election as chairman of the country’s ruling Liberal Democratic Party last week. He replaces Prime Minister Fumio Kishida who officially resigned earlier in the day.
Ishiba’s rise could give the Bank of Japan more cover to raise interest rates further, according to some analysts. Shares in Japan fell Monday as investors digested the news, before rebounding slightly on Tuesday.
However, newly appointed economy minister Ryosei Akazawa said on Wednesday that Ishiba expected the central bank to carefully assess the economy before raising rates again, according to Reuters.
“Our main priority is to ensure that Japan completely exits deflation,” Akazawa told reporters, adding that it would take some time. While Ishiba had previously commented on the need for monetary policy normalization, Akazawa said the statement “has various circumstances.”
In individual stock news, Mitsubishi Motor District up 4.6% after Mitsubishi Motors North America reported a 22.1% increase in year-to-date sales compared to the same period last year. Mitsubishi Electric rose 1%.
South Korean data
Traders in Asia are evaluating data on consumer inflation from South Korea. The country’s consumer price index rose 1.6% in September from a year earlier, data showed on Wednesday morning, cooler than economists polled by Reuters had expected a 1.9% rate. The figure rose 0.1% month-on-month, less than the 0.4% gain in the previous month and the 0.3% economists had expected.
According to a survey by S&P Global released Wednesday, South Korea’s factory activity contracted at the fastest pace in a 15-month period in September as overseas demand slowed this year. The purchasing managers’ index for manufacturing was at 48.3 in September, down from 51.9 the previous month.
Middle East Tensions
In the US overnight, the Dow Jones Industrial Average fell more than 173 points, while the S&P 500 and Nasdaq Composite fell 0.93% and 1.53% respectively. Oil prices and the CBOE Volatility Index (.VIX) jumped as Iran fired ballistic missiles at Israel.
The attack came after Israel began a ground operation into Lebanon as tensions rose with the Iran-backed Hezbollah militant group.
Israeli Prime Minister Benjamin Netanyahu said Iran’s missile attack had failed and vowed to retaliate. “Iran made a big mistake tonight — and it will pay,” he said, according to NBC News, adding that “the regime in Iran does not understand our determination to defend ourselves and our determination to retaliate against our enemies.”
Speaking to CNBC’s “Squawk Box Asia” on Wednesday, economist Stephen Roach warned that the Middle East conflict poses risks to oil prices and inflation. He also said the US Federal Reserve should reconsider its accommodative monetary policy.
Meanwhile, US investors are looking forward to the September jobs report to be released on Friday. The U.S. economy created fewer jobs than expected in August, reflecting a sluggish labor market.
“If we’re going to have a regional conflict in the Middle East, which is bound to happen, happen when unemployment rises in the United States, the market really won’t know which way to go,” said Roach, adding that such a scenario could create dramatic volatility in the market.
—CNBC’s Brian Evans and Alex Harring contributed to this report.
