China stocks surge after PBOC says correction ‘almost over’

Equity markets in China outperformed the region on Monday, following a report by the China Securities Journal that quoted a senior central banker saying that the country’s stock market correction is “almost over.”

Yi Gang, deputy governor of the People’s Bank of China (PBOC) told an annual meeting of the International Monetary Fund (IMF) and World Bank in Peru that the corrections in the mainland’s equity market have had limited impact on the world’s second-biggest economy as Beijing has taken a series of measures to avoid systemic risks, reportedReuters citing the official Chinese media.

The central bank also announced over the weekend the expansion of a pilot scheme that allows banks to borrow money using high quality credit assets as collateral.

Meanwhile, investors also seem to be betting on the possibility of further stimulus measures when Beijing meets later this month to discuss the 13th five-year plan, wrote analysts at the Bank of America Merrill Lynch in a note released Monday.

Symbol
Name
Price
Change
%Change
NIKKEI Nikkei 225 Index 18438.67 297.50 1.64%
HSI Hang Seng Index 22730.93 272.13 1.21%
ASX 200 S&P/ASX 200 5232.87 -46.82 -0.89%
SHANGHAI Shanghai Composite Index 3287.81 104.66 3.29%
KOSPI KOSPI Index 2021.63 2.10 0.10%
CNBC 100 CNBC 100 ASIA IDX 6667.10 15.25 0.23%

Mainland markets soar

China’s share markets came off the day’s highs in the afternoon trading session, with the Shanghai Composite closing up 3.3 percent at its highest level since August 24. Earlier in the session, it surged more than 4 percent to hit an intra-day high of 3,318.7.

Among other indexes, the CSI300 Index closed up 3.2 percent to clinch a seven-week peak. The smaller Shenzhen Composite surged 4.2 percent. Hong Kong’s Hang Seng Index got a lift from the rally among its mainland peers and traded nearly 1 percent higher on Monday.

In other news, Hong Kong-listed shares of Glencore are in a trading halt pending release of information on certain assets in Australia and Chile, the Hong Kong Stock Exchange said Monday.

An investor observes stock market at a stock exchagne hall on September 22, 2015 in Nanjing, China.

ChinaFotoPress | Getty Images
An investor observes stock market at a stock exchagne hall on September 22, 2015 in Nanjing, China.

ASX loses 0.9%

Australia’s S&P ASX 200 index snapped a five-day winning streak as profit-taking brought down key banking and resources heavyweights.

Commonwealth Bank of Australia sold down 1.2 percent, while National Australia Bank, Westpac and Australia and New Zealand Bankingsagged between 0.4 and 1 percent.

In the energy space, Oil Search widened losses to 4.2 percent, whileWoodside Petroleum and Santos declined 1.8 and 0.7 percent respectively. Market bellwether BHP Billiton fell 0.9 percent.

Read More Investors in Asia brace for a jam-packed week

Kospi adds 0.1%

South Korea’s Kospi index pared most of its advances by the final hour of trading, but managed to eke out marginal gains to chalk up a five-session winning streak.

Brokerage houses were the day’s top performers; Daewoo Securitiessoared 7.7 percent, while Samsung Securities and Mirae Asset Securities climbed 4.6 and 5.9 percent respectively.

Coway, which was in the spotlight after CJ Group said it is considering a bid for the water purifier sales and rental firm on Monday, slipped 0.1 percent in choppy trade.

Steep declines in the top weighted stocks also capped the index’s advances, with Samsung Electronics and Hyundai Motor losing 0.8 and 1.5 percent respectively.

Read More This worries South Korea more than a US rate hike

Indian stocks

The benchmark S&P BSE Sensex index closed 0.65 percent lower, as investors awaited the release of August industrial production and September inflation data later in the day.

According to a Reuters poll, India’s consumer price index (CPI) is expected to rise 4.3 percent last month on the back of higher food prices, after falling to a record low of 3.66 percent in August. However, even if inflation picks up in September, it would still remain below the Reserve Bank of India’s 6 percent target for January.

Rest of Asia

Taiwan’s weighted index marched 1.5 percent higher late Monday, touching its highest level in two months.

Large-cap Taiwan Semiconductor Manufacturing Co. rose 1.8 percent, while other tech-related names such as Pegatron and Hon Hai Precision Industry powered ahead 7.8 and 1.6 percent, respectively.

In Southeast Asia, Singapore’s Straits Times index shook off a negative start to bounce up 1.12 percent at the close to a near eight-week high.

Indonesia’s Jakarta Composite gained 0.9 percent to hit its highest level since August 11, while Malaysia’s FTSE Bursa Malaysia KLCi slipped back into the red following the release of industrial production data which came in below expectations.

The Malaysian benchmark index close 0.19 percent higher.

Markets in Japan are closed for the Health and Sports Day holiday.

Major U.S. averages finished higher on Friday, with the Nasdaq Composite leading gains by notching up 0.4 percent as investors digested dovish signals from the U.S. Federal Reserve minutes. The blue-chip Dow Jones Industrial Average and the S&P 500 ticked up 0.2 and 0.1 percent respectively.

This entry was posted in Global Economy. Bookmark the permalink.

Leave a Reply