Asia report: Chinese markets plunge on mixed day for region

Asia-Pacific markets saw a mixed performance on Wednesday, with Chinese stocks snapping a 10-day winning streak amid a volatile trading session.

Investors in the region closely watched policy decisions from the Reserve Bank of New Zealand and the Reserve Bank of India.

“China's soaring stock market experienced a sharp decline on Wednesday, as disappointment over the lack of follow-through on stimulus promises triggered a rapid repricing lower in the spectacular stimulus inspired rally,” said TickMill’s Patrick Munnelly.

“The Shanghai Composite fell more than 6% with the CSI300 printing losses of more than 7%, marking its largest slump since the pandemic collapse of February 2020.

“The bounce in Hong Kong was quickly reversed, and metals and other commodities, as well as China proxies like the Australian dollar, were all on the slide.”

Munnelly said China watchers were suggesting that the National Development and Reform Commission's news conference was not the platform for a substantial policy announcement.

“The chance to reassure markets has been lost for now, and the rally is unlikely to continue unless authorities provide investors with substantial financial support.”

China bourses plunge on mixed day for region

In Japan, both the Nikkei 225 and Topix posted gains, with the Nikkei rising 0.87% to close at 39,277.96, and the Topix gaining 0.3% to 2,707.24.

Among the top performers, Seven & i Holdings surged 4.71% on reports that Canadian convenience retailer Alimentation Couche-Tard increased its acquisition offer by about 20% for the parent company of 7-Eleven.

Other notable gains included Lasertec and Advantest, which rose 4.42% and 3.65%, respectively.

China's markets saw sharp declines, with the Shanghai Composite plunging 6.62% to 3,258.86 and the Shenzhen Component falling 8.15% to 10,557.81.

Losses in Shanghai were widespread, with Suzhou Harmontronics Auto Tech down 14.18%, Guangdong Jia Yuan Technology sliding 14.1%, and Beijing Tianyishangjia New Material losing 13.77%.

Hong Kong’s Hang Seng Index fell 1.38% to 20,637.24, as major players like Citic Pacific, Alibaba Health Information Technology, and Hong Kong Exchange and Clearing saw significant declines, falling 8.5%, 7.08%, and 6.04%, respectively.

Australia's S&P/ASX 200 inched up 0.13% to 8,187.40, with ZIP Co leading the gains at 6.25%, followed by Summerset Group and Block Inc, which were up 4.82% and 4.35%, respectively.

New Zealand's S&P/NZX 50 gained 1.75% to 12,776.13, bolstered by strong performances from Property for Industry, up 4.6%; Ryman Healthcare, ahead 4.53%; and Mainfreight, which added 4.21%.

Currencies reflected a steady dollar, as it rose 0.24% on the yen to trade at JPY 148.56, while it edged up 0.22% against the Aussie to AUD 1.4862 and advanced 0.91% on the Kiwi, changing hands at NZD 1.6439.

Oil prices also rose, with Brent crude futures last up 0.44% on ICE at $77.52 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.34% to $73.82.

RBNZ cuts interest rates while India’s central bank stands pat

On the monetary policy front, the Reserve Bank of New Zealand (RBNZ) reduced its benchmark interest rate by 50 basis points on Wednesday, bringing the official cash rate to 4.75%.

It marked the second consecutive cut, following an unexpected 25 basis point reduction in August.

The move was widely anticipated by economists.

Meanwhile, the Reserve Bank of India (RBI) opted to hold its policy interest rate steady at 6.5%.

The decision, made in a split vote with one board member pushing for a 25 basis point cut, reflected the central bank's cautious stance on inflation.

Although inflation on the subcontinent eased in July and August compared to June, the RBI warned of potential upward pressure on prices in September due to adverse base effects and rising food costs.

In Japan, business sentiment among large manufacturers improved in October, according to the Reuters Tankan survey.

The sentiment index rose to +7 from +4, signalling growing confidence in the manufacturing sector.

However, non-manufacturing firms reported a decline in optimism, with their sentiment index slipping to +20 from +23.

Looking ahead, China’s finance ministry announced a press conference scheduled for Saturday 12 October.

While the agenda remained unclear, the briefing came on the heels of recent volatility in Chinese markets and disappointment at a lack of fresh stimulus measures in the wake of the Golden Week holiday.

Reporting by Josh White for Sharecast.com.