Asia report: Markets finish mixed in wake of PBoC easing

25th Sep 2024 08:39

(Sharecast News) - Asian markets experienced a mixed day of trading on Wednesday, with Chinese stocks leading gains in the region following Beijing's latest stimulus measures.

The People's Bank of China cut the medium-term lending facility rate, boosting investor sentiment in the country.

"Beijing's substantial stimulus package continues to circulate through Chinese markets; however, its influence on additional markets may be diminishing," said Patrick Munnelly at TickMill.

"Hong Kong's Hang Seng and mainland blue-chips opened in a buoyant mood; however, they are now well off their best levels, with the mainland index in negative territory.

"China's strong start to Wednesday initially supported the stock benchmarks in Australia and South Korea, whose economies closely link to China's fortunes."

However, as with the major Chinese equities, those gains soon dissipated, Munnelly added.

"Investors have begun to question whether any of the stimulus measures announced by the Chinese authorities on Tuesday would address the fundamental structural issues, despite the euphoria that had accompanied the announcement.

"The Nikkei 225 in Japan closed lower, ending a four-session winning stretch.

"The market was seen as susceptible to profit-taking after the Nikkei rallied for a fourth consecutive session to a three-week closing high in the previous session, bolstered by the Bank of Japan's dovish stance."

Markets mixed after Tuesday's buoyant session

In China, the Shanghai Composite rose by 1.16% to close at 2,896.31, while the Shenzhen Component climbed 1.21% to 8,537.73.

Gains in Shanghai were driven by strong performances from Minmetals Capital, Xinjiang Youhao Group, and Jilin Yatai Group, each surging over 10%.

Hong Kong's Hang Seng Index also posted gains, up 0.68% to 19,129.10.

Notable performers included Alibaba Health Information Technology, China Merchants Bank, and WuXi Biologics, with increases of 5.65%, 4.52%, and 4.2%, respectively.

Conversely, Japan's markets saw modest declines - the Nikkei 225 fell by 0.19% to 37,870.26, and the Topix dropped 0.23% to 2,650.50.

Losses on Tokyo's benchmark were led by Kyowa Kirin, which plummeted 13.11%, followed by Resona Holdings and Tokio Marine, down 5.11% and 4.04%.

South Korea's Kospi 100 declined sharply by 1.5%, closing at 2,594.92.

Key laggards were LG Corporation, SK Square, and LG Electronics, which saw drops of 7.38%, 7.12%, and 6.96%, respectively.

Australia's S&P/ASX 200 edged down 0.19% to 8,126.40 despite consumer price rises easing in line with economists' expectations in August.

The index was weighed down by Premier Investments, NUIX, and Pro Medicus, with losses of over 4% each.

New Zealand's S&P/NZX 50 also slipped, down 0.65% to 12,224.53, as declines in Pacific Edge, Synlait Milk, and Genesis Energy dragged the index lower.

In currency markets, the dollar was last up 0.64% on the yen to trade at JPY 144.15, as it gained 0.28% against the Aussie to AUD 1.4550, and 0.49% on the Kiwi, changing hands at NZD 1.5850.

Oil prices remained relatively stable, with Brent crude futures last down 0.03% on ICE at $75.15 per barrel, and the NYMEX quote for West Texas Intermediate slipping 0.08% to $71.50.

PBoC cuts medium-term lending facility rate, Australian inflation eases

On the news front, the People's Bank of China lowered its medium-term lending facility rate on Wednesday from 2.3% to 2%, marking its second cut in three months.

The central bank previously reduced the rate from 2.5% to 2.3% in late July, with the latest move part of its broader efforts to bolster economic growth and support the country's financial markets.

Chinese markets rallied on Tuesday, with the Hang Seng Index (HSI) achieving its best performance in seven months after the PBoC announced a slew of easing measures.

Mainland China's CSI 300 also saw significant gains, posting its largest single-day increase in over four years.

Meanwhile, investors in Australia analysed the country's latest inflation data as the consumer price index rose by 2.7% year-on-year in August, matching economists' forecasts.

The increase was a slowdown from the 3.5% rise recorded in July, indicating a slight easing in inflationary pressures within the Australian economy.

Reporting by Josh White for Sharecast.com.