Asia Stocks Rise on China News, Energy Shares Gain: Markets Wrap
(Bloomberg) — Stocks in Asia gained on optimism over China’s latest measures to bolster its equity market. Energy shares were boosted by higher oil prices.
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China’s securities regulator said on the weekend it will halt the lending of certain shares for short selling from Monday. The new initiative adds to measures taken in recent weeks to halt a slide in the nation’s stocks that has seen the MSCI China Index tumble about 60% from a February 2021 peak.
“The very poor sentiment leading to this could potentially open the door for some technical rebound” in Chinese shares, said Homin Lee, a senior macro strategist at Lombard Odier, speaking on Bloomberg Television. “We’re slightly more cautious because what’s really needed is a change in the inflation outlook for the country and the overall sentiment in the private sector.”
A gauge of mainland China shares listed in Hong Kong jumped as much as 2.1% before trimming gains. Mainland equities mostly failed to match the advance in their Hong Kong peers, amid concern over a proposal requiring US cloud firms to reveal foreign clients developing AI applications.
Europe stock futures edged lower and those for the US were little changed as investors weighed risks from the Middle East conflicts at the start of a busy week for the global policy outlook. Key events in coming days include a Federal Reserve policy decision Wednesday, a Bank of England one Thursday, and US payroll numbers Friday.
Chinese property shares erased an earlier gain after a Hong Kong court ordered the liquidation of China Evergrande Group. Trading in the company’s shares was suspended after it tumbled 21%. A Bloomberg Intelligence gauge of Chinese real estate developers was down 1% in afternoon trading after climbing as much as 3.8%.
“This could give an example for those developers that are in the restructuring process,” said Willer Chen, an analyst at Forsyth Barr Asia in Hong Kong.
Brent and West Texas Intermediate crude gained for a fourth day, rising to their highest levels since November in intraday trading. The US said Iranian-backed militants killed three service members, with US President Joe Biden pledging to retaliate. Oil climbed on Friday after Houthi rebels attacked a vessel carrying Russian fuel.
The Australian and New Zealand dollars outperformed their Group-of-10 peers on higher commodity prices and as China’s stock-market support measures boosted investor sentiment. The US dollar and Treasuries steadied in Asia.
No change in policy is expected from the Fed on Wednesday, according to Win Thin, global head of currency strategy at Brown Brothers Harriman.
“The discussions about slowing and eventually ending quantitative tightening are likely to continue but we believe it is too early to announce any changes at this meeting,” he wrote in a note. “Risks for the dollar remain skewed to the upside this week as there is room for fed funds future pricing to converge toward the FOMC’s projections.”
Big tech companies such as Microsoft Corp. and Apple Inc. are due to report results this week.