Asia: Equities end week on upbeat note as Chinese stocks rally

The majority of Asian equity markets ended the week on an upbeat note, as Chinese stocks extended their gains.

The Shanghai Composite Index closed up 1.91%, while the Shenzhen Composite Index rose 2.82%, meaning the two main benchmarks in mainland China have gained 6.1% and 6.8% respectively this week.

Chinese stocks entered a bull market on Thursday, rising 20% since reaching the bottom of the summer sell-off on 26 August.

Data released on Friday showed car sales in China were up 11.3% in October which was the biggest monthly gain since March after the government had lowered taxes on small vehicles at the end of September.

Hong Kong’s Hang Seng Index declined 0.80% but closed up 1% for the week, boosted by a strong performance from Chinese stocks.

Elsewhere, Japan’s Nikkei Stock Average gained 0.78% to close at 19265.60, its highest close since 21 August, as investors remained confident the Bank of Japan will introduce some fresh stimulus measures.

“The Bank of Japan are hoping for oil prices help them out, but note things might not work out quite as hoped due to the global backdrop,” said analysts at Rabobank.

Shares in Japan Post Holdings declined 3.57% but have gained 25% since the company’s initial public offering on Wednesday, while Japan Post Holdings and Japan Post Insurance declined 3.21% and 4.11% respectively but surged 18% and 70% respectively this week.

Airbag maker Takata tumbled 6.19% after falling 25% in the previous session after the firm was accused of misrepresenting and manipulating test data for its airbag inflaters.

Meanwhile, Australia’s S&P/ASX 200 gained 0.42% but closed down 0.5% for the week, as the banking sector marked its second consecutive week of decline.

On the currencies front, the yen declined 0.18% against the dollar, while the Australian dollar rose 0.10% against its US counterpart.

“The Aussie dollar has had a slightly more choppy session after the RBA’s quarterly update saw inflation forecasts lowered but signaled that the labour market is a little stronger than the RBA had previously expected,” said analysts at Deutsche Bank.