Shares in China jumped by mid-day on Thursday as Asian stocks broadly built on the momentum seen on Wall Street overnight.
“Calm has finally returned to markets,” analysts at Mizuho Bank wrote in a note. Trading in markets globally was volatile at the start of the week, but stabilized after news reports in recent days indicated an easing in tensions between the U.S. and China.
Greater China markets initially opened mixed, but staged a comeback to lead the rest of Asia. Hong Kong’s Hang Seng Index climbed 1.34 percent by the lunch break at noon, while the Shanghai composite was up 1.60 percent. The Shenzhen composite, which opened slightly lower, recovered to gain 1.538 percent.
In Japan, the Nikkei 225 was up 1 percent and the Topix index was 0.77 percent higher. Over in South Korea, the Kospi was 0.64 percent higher.
Australian stocks, meanwhile, saw relatively modest gains. The ASX 200 index inched up 0.39 percent, with the heavily weighted financials sub-index rising by 0.71 percent.
There were big moves in the Australia market. Shares of Hutchison Telecommunications plunged 14 percent, while that of TPG Telecom fell by 16 percent. The two companies announced plans to merge in August this year, but the Australian Competition and Consumer Commission on Thursday released a statement expressing concerns about the proposal.
The performance of Asian shares followed a positive close in U.S. stocks. The Dow Jones Industrial Average rose by 157.03 points to 24,527.27 to end higher by 0.64 percent, the S&P 500 climbed 0.54 percent to close at 2,651.07, and the Nasdaq Composite jumped nearly 1 percent to 7,098.31.
The Wall Street Journal reported Beijing is working to increase access to foreign companies, a move aimed at smoothing U.S.-China trade relations.
The plan would replace the country’s Made in China 2025 initiative, the report said. Made in China 2025 is a framework aimed at making China a leader in industries like clean-energy cars and robotics, and has been a point of contention in the tariff fight between Washington and Beijing.
“In the scheme of things and were this to prove true, this is far more relevant than China agreeing to restart purchases of American soybeans, or even reducing the tariff on US car imports from 40% to 15%, as has been indicated in the last 24 hours,” Ray Attrill, head of FX strategy at National Australia Bank, wrote in a morning note.
Theresa May wins crucial vote
A key development in Europe overnight is U.K Prime Minister Theresa May winning a crucial vote of confidence in her leadership. The pound rose about 1 percent on the news.
May won the leadership challenge by 200 votes to 117 votes against her in the ballot of Conservative members of parliament (MPs). Winning this vote means her leadership cannot be challenged for another year.
Another crucial event coming up in Europe on Thursday is the interest rate decision by the European Central Bank at 8:45pm HK/SIN. Investors would be looking out for the ECB’s guidance for its interest rates path and any announcement on its asset purchase program.
Currencies
The British pound was at around 1.2614 against the U.S. dollar, holding onto overnight gains after May’s victory in a leadership challenge.
The U.S. dollar index, which tracks the greenback against a basket of major currencies, was at 97.080, climbing slightly from 97.044 at the start of Asian trading hours.
The Japanese yen gave up earlier gains against the U.S. dollar to 113.42 from yesterday’s 113.27, while the Australian dollar stayed flat against the greenback at about 0.7226.
Source: CNBC
