Asian markets rise, shaking off China slowdown concerns
Asian markets bounced back from slight early losses on Tuesday after senior economic officials said Beijing will cut taxes and keep monetary policy flexible to help weather China’s slowdown.
Japan’s Nikkei 225 index NIK, +0.91% , reopening after a market holiday, added 0.8%. The Kospi SEU, +1.32% in South Korea jumped 1.3%. Hong Kong’s Hang Seng HSI, +1.54% rebounded 1.7% after closing 1.4% lower on Monday. The Shanghai Composite index SHCOMP, +0.75% was up 0.9% and Australia’s S&P ASX 200 XJO, +0.71% rose 0.5%. Shares rose in Taiwan Y9999, +0.85% , Singapore STI, +1.40% and Indonesia JAKIDX, -0.40% .
Among individual stocks, Japanese camera and optics maker Olympus Corp. 7733, +16.60% shot higher after recent upgrades by a number of analysts. In Hong Kong, AAC Technologies 2018, +6.46% and China Life Insurance 2628, +2.96% posted strong gains, while Samsung 005930, +1.87% and SK Hynix 000660, +2.25% rallied in South Korea. Australia energy companies such as Woodside Petroleum WPL, +1.15% and Beach Energy BPT, +4.15% surged as oil prices gained.
News Monday that Chinese exports fell in December weighed on U.S. indexes. Technology companies fell, but a strong quarterly report by Citigroup C, +3.95% lifted bank stocks. The broad S&P 500 index SPX, -0.53% shed 0.5% to 2,582.61. The Dow Jones Industrial Average DJIA, -0.36% lost 0.4% to 23,909.84 and the Nasdaq composite COMP, -0.94% was 0.9% lower at 6,905.92.
Mainland Chinese company shares surged after senior economic leaders, briefing reporters Tuesday on the outcome of an annual policy-setting meeting last month, pledged to keep the monetary policy of the world’s No. 2 economy flexible but stable and to support growth with improved access to financing for private and smaller enterprises. The assurances came as China weathers its worst slowdown since the global financial crisis amid a punishing tariffs dispute with the U.S.
On Monday, China reported that its exports to the U.S. fell 3.5% from a year earlier in December to $40.3 billion, although its overall trade surplus with the United States surged last year. Markets initially slipped on worries that tariffs were putting a drag on the world’s second largest economy. But buying enthusiasm recovered on hopes that Chinese negotiators will be more keen to resolve a trade dispute with the U.S. Chinese Vice Premier Liu He is set to lead negotiators at talks in Washington later this month.
“Early movers had mostly headed into green, paring back losses from Monday’s worry over China’s trade performance,” Jingyi Pan of IG said in a market commentary. “To some extent, the market is gradually shrugging this off as a one-off incident after front loading previously. The impetus this provides for a U.S.-China resolution had also likely inspired the gains,” she added.
Benchmark U.S. crude oil CLG9, +1.37% added 62 cents to $51.13 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.08 to settle at $50.51 per barrel on Monday. Brent crude LCOH9, +1.36% , the international standard, gained 71 cents to $59.70. It gave up $1.49 to $58.99 a barrel in London.
The dollar USDJPY, +0.49% strengthened to 108.51 yen from 108.16 yen late Monday.
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