Asian stocks regrouped on Thursday boosted by an upbeat Wall Street overnight but China’s property struggles and continuing Covid threat curbed investor enthusiasm.
Japanese stocks closed higher after the Bank of Japan (BOJ) retained its easy monetary policy stance, a move largely expected by investors, with sentiment boosted further by Wall Street’s advance.
The Nikkei share average ended up 0.44% at 27,803, topping the six-week high reached the previous day. The broader Topix added 0.2% to 1,950.59.
The gains came as the BOJ maintained ultra-low interest rates, compared with a slew of global central banks tightening policies, but it projected inflation this year to be at 2.3%, higher than its 2% target.
“The stock market appears to believe that this level won’t have a big influence on government policy,” a market participant at a domestic asset management firm said.
Steel companies fell after the United States voted to extend duties on steel from Japan, China, India, South Korea, and the UK for five more years, while revoking the same duties for Brazil.
Kobe Steel lost 3.3%, while Nippon Steel fell 3%. Pacific Metals, which primarily manufactures and sells nickel, was up 1.5%.
Technology companies were among the best performers. Nikon Corp was the top gainer, rising 3%.
China’s Covid Resurgence
Meanwhile, investors kept a wary eye on the situation in China, where a resurgence in Covid-19 cases and a slump in the property market amid mortgage boycotts could pour cold water on risk sentiment.
“Past due mortgages doubled over the week, and … potential homebuyers are waiting for a general drop in home prices for the housing market, including completed projects,” ING analysts said in a note to clients on Thursday.
“This is negative even for cash-rich developers.”
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.1%. The Shanghai Composite Index dipped 1%, or 32.72 points, to 3,272, while the Shenzhen Composite Index on China’s second exchange dropped 0.75%, or 16.65 points, to 2,194.
The Hang Seng Index dropped 1.5%, or 315.59 points, to 20,574.63.
Elsewhere across the region, stocks in South Korea and Malaysia rose 0.9% each to lead gains in the region. Philippine stocks bucked the trend to fall 0.3%.
Indian stocks edged up with Mumbai’s signature Nifty 50 index advancing 0.3%, or 48.80 points, at 16,569.65.
Russia Resumes Europe Oil Supplies
Globally, stock markets eased as a resumption of Russian gas supplies to Europe lifted the euro ahead of the European Central Bank’s anticipated first interest rate hike in over a decade to quell inflation.
The flow of Russian gas resumed to Germany after a 10-day outage to ease Europe’s supply concerns for now, helping to ease worries about fallout on the economy.
Nasdaq 100 futures fell 0.25% and S&P 500 futures fell 0.2%. Earnings from Blackstone, Dow Chemical, Philip Morris International, Twitter and American Airlines were due on Thursday.
The benchmark 10-year Treasury yield held at 3.0415%, below the 2-year yield of 3.2359%, a market signal that often presages a recession.
Oil prices fell for a second straight session, as demand concerns outweighed tight global supply after US government data showed tepid gasoline consumption during the peak summer driving season.
Brent crude was down 2.25% at $104.50 a barrel, while US West Texas Intermediate dropped 2.6% to $97.32 a barrel.
Tokyo – Nikkei 225 > UP 0.44% at 27,803.00 (close)
Hong Kong – Hang Seng Index
Shanghai – Composite
New York – Dow > UP 0.15% at 31,874.84 (Wednesday close)
- Reuters with additional editing by Sean O’Meara