Asia report: Hong Kong rally continues on China reopening chatter

Stock markets were mixed at the end of trading in Asia on Friday, with Hong Kong’s benchmark surging more than 5% on continued speculation of a post-Covid reopening in China.

In Japan, the Nikkei 225 was down 1.68% at 27,199.74, as the yen strengthened 0.43% on the dollar to last trade at JPY 147.62.

Automation specialist Fanuc was down 0.38%, fashion firm Fast Retailing was off 0.42%, and technology conglomerate SoftBank Group was 2.21% weaker.

Given the market was closed for a holiday on Thursday, the session was brimming with reaction to earnings released on Wednesday.

Z Holdings, which owns locally-prominent messaging service Line, tumbled 14.18% after it reported a 25.7% fall in first-half net earnings.

Mitsubishi Motors, meanwhile, revved ahead 18.01% after its net earnings rocketed to JPY 82.74bn from JP{Y 21.67bn year-on-year.

The broader Topix index was off 1.29% by the end of trading in Tokyo, settling at 1,915.40.

On the mainland, the Shanghai Composite was up 2.43% at 3,070.80, and the technology-heavy Shenzhen Component was 3.2% firmer at 11,187.14.

South Korea’s Kospi managed gains of 0.83% to 2,348.43, while the Hang Seng Index in Hong Kong rocketed 5.36% to 16,161.14.

It made for another day of gains in the special administrative region, amid ongoing chatter that the Beijing politburo was considering an end to their zero-Covid policy and a full reopening of China as soon as March.

Chinese technology plays were in the green on the rumours, with Alibaba Group up 10.95%, JD.com ahead 12.52%, Meituan rising 5.65%, and Tencent 7.77% firmer.

The blue-chip technology stocks were on the front foot in Seoul as well, with Samsung Electronics up 0.34%, and SK Hynix 2.18% firmer.

“The Hang Seng index recorded its biggest weekly gain in 11 years,” noted AJ Bell investment director Russ Mould of Friday’s moves.

“A good chunk of those gains came on Friday as stocks jumped in anticipation that the Chinese government would relax its zero-Covid policy from March next year.”

Mould said that before this week’s rally, Asian stocks had struggled this year amid fears of a sharp slowdown in economic growth, partially caused by stringent Covid lockdown rules in China.

“Even after the rebound this week, Hong Kong’s index remains 30.6% lower year-to-date.”

Oil prices were well above the waterline as the region entered the weekend, with Brent crude futures last up 3.46% on ICE at $97.95 per barrel, and West Texas Intermediate ahead 3.96% at $91.66 on NYMEX.

In Australia, the S&P/ASX 200 managed gains of 0.5% to 6,892.50, while across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.41% to 11,230.75.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 1.45% at AUD 1.5671, and the Kiwi advancing 1.09% to NZD 1.7134.

Reporting by Josh White for Sharecast.com.