Asia report: Hang Seng leads bounce for region's markets

Stock markets closed in the green in Asia on Tuesday, with Hong Kong’s bourse leading the gains, while Australia’s central bank warned of further interest rate rises in its latest minutes.

In Japan, the Nikkei 225 was up 0.42% at 26,659.75, as the yen weakened 0.12% against the dollar to last trade at JPY 129.31.

It was a positive day for the benchmark’s major components, with robotics specialist Fanuc up 0.83%, Uniqlo owner Fast Retailing ahead 0.67%, and tech investing giant SoftBank Group managing gains of 0.23%.

The broader Topix index was ahead 0.19% by the end of trading in Tokyo, closing at 1,866.71.

On the mainland, the Shanghai Composite was 0.65% higher at 3,093.70, and the smaller, technology-centric Shenzhen Composite was 0.73% firmer at 1,940.05.

South Korea’s Kospi was ahead 0.92% at 2,620.44, while the Hang Seng Index in Hong Kong jumped 3.27% to 20,602.52.

Chinese technology plays led the gains in the special administrative region, with Alibaba Group rocketing 7.03%, Meituan surging 6.24%, and Tencent Holdings 5.26% higher.

The blue-chip tech stocks were in the black in Seoul as well, with Samsung Electronics up 1.96% and SK Hynix ahead 1.81%.

Oil prices were higher as the region went to bed, with Brent crude futures last up 1.09% on ICE at $115.49 per barrel, and West Texas Intermediate ahead 0.98% on NYMEX to $115.32.

Richard Hunter, head of markets at Interactive Investor, said a number of economic factors had been in play regionally and globally, with the impact of lockdowns in China adding to the “cocktail of concerns”.

“The latest data showed a marked impact on consumption, industrial production and employment, posing questions as to whether the world’s largest economy will shrink in the current quarter,” Hunter noted.

“With workers and consumers confined to their homes in the affected areas, the steep plunge in retail sales and factory activity may encourage the Chinese authorities to consider measures to ease the burden as the country begins its gradual move back to normality.

“Asian markets perked up on the possibility of a return to form overnight, even though the shutdowns will likely have left their mark.”

In Australia, the S&P/ASX 200 added 0.27% to 7,112.50, as investors digested the latest meeting minutes from the Reserve Bank of Australia, which warned that further rate hikes were likely.

The central bank raised its cash rate for the first time since 2010 at its May meeting, adding 25 basis points to bring it to 0.35%.

“Inflation was now above the target and was not forecast to return to the target range until mid-to-late 2024,” the RBA said in its minutes.

“While the significant rise in inflation had been largely the result of global factors, which were likely to have a more temporary effect on inflation, the flow of information on inflation and wages over the preceding month had been consistent with more persistent inflationary pressures arising from limited spare capacity in the domestic economy.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was the region’s odd one out, slipping 0.18% to 11,137.88.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.92% at AUD 1.4214, and the Kiwi advancing 0.89% to NZD 1.5705.