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Singapore — Asian shares jumped and the yuan rose on Tuesday as investors cheered China’s pledge to step up support for its sputtering economy, with the heaviest buying in Hong Kong’s beaten-down property sector while the dollar dipped against rivals.
MSCI’s broadest index of Asia-Pacific shares outside Japan snapped a six-day losing streak with a 1.5% gain. Japan’s Nikkei fell 0.4%.
In China, the Shanghai composite index rose 1.9% and the Hang Seng leapt 3% with property stocks that had been diving on debt repayment worries bouncing back.
Country Garden jumped 14% and was the top-traded stock in Hong Kong, while its onshore-traded debt recovered to slightly less distressed levels. Shares in its services arm and rival Longfor rose by more than 20%.
China’s leaders pledged on Monday to step up help for the economy amid a tortuous post-Covid recovery and signalled there would be more to come for the property industry.
“Perhaps the biggest move was the pledge to ‘adjust and optimise property policies’, which opens the door for further property easing,” Citi analyst said. “The Chinese economy could muddle through the second half amid such a policy setting.”
An index of mainland developers jumped 11% on Tuesday and was headed for its best day in eight months.
In the currency market, the Chinese yuan strengthened about 0.5% to 7.1526 per dollar, helped by state banks selling dollars onshore and offshore early in Asia.
The move set the tone across other pairs and the dollar index, which measures the US currency against six rivals, eased 0.1% to 101.31. The China-sensitive Australian dollar rose 0.4% to $0.6767. The kiwi added 0.2% to $0.6215.
A big session of earnings lies ahead, along with the release of the eurozone bank lending survey on Tuesday before the US Federal Reserve takes centre stage on Wednesday.
Unilever, LVMH and EssilorLuxottica report in London and Paris. Microsoft, Google parent Alphabet, Visa, General Electric and chipmaker Texas Instruments are among the heavyweights in the US.
Markets expect 25-basis-point rate hikes from both the Fed and the European Central Bank this week but beyond that pricing diverges from policymakers’ rhetoric, meaning the focus will fall on their tone and outlook.
The euro scraped off a two-week low hit overnight after a survey showed European business activity shrank much more than expected in July, reigniting recession worries. It last bought $1.1070.
The Japanese yen added 0.07% to 141.39 per dollar and investors seem in two minds over whether the Bank of Japan, which sets policy on Friday, might tweak its stance on pinning government bond yields near zero.
In the energy market, US crude rose 0.3% to $78.98 a barrel and Brent was at $82.96, also up 0.3% on the day.
Spot gold added 0.3% to $1,961 an ounce.
US wheat futures hit a five-month high on Tuesday, stretching gains after Russia’s attacks on Ukrainian ports and grain infrastructure that sparked concerns about long-term global supplies and food security.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Asia shares leap after China policy move
Singapore — Asian shares jumped and the yuan rose on Tuesday as investors cheered China’s pledge to step up support for its sputtering economy, with the heaviest buying in Hong Kong’s beaten-down property sector while the dollar dipped against rivals.
MSCI’s broadest index of Asia-Pacific shares outside Japan snapped a six-day losing streak with a 1.5% gain. Japan’s Nikkei fell 0.4%.
In China, the Shanghai composite index rose 1.9% and the Hang Seng leapt 3% with property stocks that had been diving on debt repayment worries bouncing back.
Country Garden jumped 14% and was the top-traded stock in Hong Kong, while its onshore-traded debt recovered to slightly less distressed levels. Shares in its services arm and rival Longfor rose by more than 20%.
China’s leaders pledged on Monday to step up help for the economy amid a tortuous post-Covid recovery and signalled there would be more to come for the property industry.
“Perhaps the biggest move was the pledge to ‘adjust and optimise property policies’, which opens the door for further property easing,” Citi analyst said. “The Chinese economy could muddle through the second half amid such a policy setting.”
An index of mainland developers jumped 11% on Tuesday and was headed for its best day in eight months.
In the currency market, the Chinese yuan strengthened about 0.5% to 7.1526 per dollar, helped by state banks selling dollars onshore and offshore early in Asia.
The move set the tone across other pairs and the dollar index, which measures the US currency against six rivals, eased 0.1% to 101.31. The China-sensitive Australian dollar rose 0.4% to $0.6767. The kiwi added 0.2% to $0.6215.
A big session of earnings lies ahead, along with the release of the eurozone bank lending survey on Tuesday before the US Federal Reserve takes centre stage on Wednesday.
Unilever, LVMH and EssilorLuxottica report in London and Paris. Microsoft, Google parent Alphabet, Visa, General Electric and chipmaker Texas Instruments are among the heavyweights in the US.
Markets expect 25-basis-point rate hikes from both the Fed and the European Central Bank this week but beyond that pricing diverges from policymakers’ rhetoric, meaning the focus will fall on their tone and outlook.
The euro scraped off a two-week low hit overnight after a survey showed European business activity shrank much more than expected in July, reigniting recession worries. It last bought $1.1070.
The Japanese yen added 0.07% to 141.39 per dollar and investors seem in two minds over whether the Bank of Japan, which sets policy on Friday, might tweak its stance on pinning government bond yields near zero.
In the energy market, US crude rose 0.3% to $78.98 a barrel and Brent was at $82.96, also up 0.3% on the day.
Spot gold added 0.3% to $1,961 an ounce.
US wheat futures hit a five-month high on Tuesday, stretching gains after Russia’s attacks on Ukrainian ports and grain infrastructure that sparked concerns about long-term global supplies and food security.
Reuters
Gold gains on weaker dollar
Oil prices rise for third session in a row
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