Asia report: Most markets rise as China opens 'swap scheme'

10th Oct 2024 09:39

(Sharecast News) - Most Asia-Pacific markets posted gains on Thursday, buoyed by positive sentiment from Wall Street and investor optimism ahead of key US inflation data.

Regional markets were broadly higher, with notable performances across Japan, China, Hong Kong, South Korea, and Australia.

"Asian stocks received a boost on Thursday from Chinese stocks as China's central bank launched its CNY 500bn facility to stimulate capital markets, while the dollar remained near a two-month high ahead of US inflation data later in the day," said Patrick Munnelly at TickMill.

"The People's Bank of China announced it would start accepting applications from financial institutions to join a newly created funding scheme - a plan it announced on 24 September as part of a series of stimulus measures that drove Chinese stocks higher."

Munnelly said markets were "eagerly awaiting" the Chinese finance ministry's press conference on Saturday, where it was set to unveil the details of its stimulus plan.

"Once more information is provided on the scale of spending, other policymakers will be better positioned to implement complementary supportive policies within their respective domains."

Most markets rebound from recent losses

In Japan, the Nikkei 225 advanced 0.26% to close at 39,380.89, while the Topix index rose 0.2% to 2,712.67.

Major contributors to the rally on Tokyo's benchmark included Nikon, which surged 5.55%, along with SoftBank Group and Ricoh, up 3.97% and 3.12%, respectively.

China's markets were mixed, with the Shanghai Composite gaining 1.32% to 3,301.93, as real estate and energy stocks drove the rally.

Top performers included Tianjin Realty Development Group, Henan Rebecca Hair Products, and Yunnan Coal & Energy, all gaining over 10%.

However, the Shenzhen Component fell 0.82% to finish the day at 10,471.08.

Hong Kong's Hang Seng Index jumped 2.98% to 21,251.98, led by a surge in consumer and tech stocks.

China Resources Beer soared 10.42%, while Geely Automobile and Trip.com Group rose 9.51% and 8.48%, respectively.

South Korea's Kospi 100 inched up 0.27% to 2,599.72, with tobacco giant KT&G rocketing 12.95%, leading the gains.

Pharmaceutical company Yuhan and Hyundai Heavy Industries also performed well, rising 7.01% and 5.12%, respectively.

Australia's S&P/ASX 200 added 0.43% to close at 8,223.00, driven by significant strength in the mining sector.

Arcadium Lithium surged 38.75% after it agreed to be bought by Anglo-Australian mining giant Rio Tinto in a deal worth $6.7bn.

Other mining stocks were also higher in Sydney, with Mineral Resources and Bellevue Gold gaining 6.76% and 6.32%, respectively.

New Zealand stocks were in the red, as the S&P/NZX 50 fell 0.17% to 12,754.58.

Retailer KMD Brands dropped 5.77%, with Serko and Property for Industry also under pressure, down 4.35% and 3.96%.

In currency markets, the dollar was last down 0.15% on the yen, trading at JPY 149.09.

The greenback was also weaker against its antipodean counterparts, falling 0.09% on the Aussie to AUD 1.4872, and retreating 0.19% from the Kiwi to change hands at NZD 1.6461.

Oil prices rose, with Brent crude futures last up 0.81% on ICE at $77.20, and the NYMEX quote for West Texas Intermediate climbing 0.93% to $73.92.

Producer prices rise faster than expected in Japan, PBoC opens swap scheme

In economic news, Japan's producer prices rose faster than expected in September, with the producer price index increasing by 2.8% year-on-year.

That marked an acceleration from the revised 2.6% gain recorded in August, and exceeded the 2.3% increase forecast by economists.

On a month-on-month basis, the PPI remained flat, defying market expectations of a 0.3% decline.

Meanwhile, the export price index fell by 0.4% and the import price index dropped by 1.3%.

In China, the central bank introduced a new liquidity tool aimed at boosting stock market investments.

Financial institutions such as securities firms, fund companies and insurers were now eligible to apply for the 'swap scheme', initially valued at CNY 500bn (£54.03bn).

The initiative from the People's Bank of China was intended to improve funding access and support the purchase of shares, providing a potential boost to market liquidity.

China's finance ministry was meanwhile set to hold a press briefing on 12 October, where additional details regarding its policy and economic developments were expected to be disclosed.

The briefing was anticipated to shed more light on the government's strategies for stimulating growth amid a challenging economic environment.

Reporting by Josh White for Sharecast.com.