Asia report: Most markets rebound from Tuesday sell-off

Markets in the Asia-Pacific region rebounded on Wednesday, recovering from a broad sell-off on Tuesday and primarily driven by Japan’s markets.

Economic indicators from Australia and Japan were also in focus, with Investors digesting Australia’s third-quarter GDP numbers and the Reuters Tankan survey for December, which showed improved sentiment among large Japanese manufacturers.

“Asia-Pacific stocks experienced widespread gains, driven by a more subdued yield environment, increased risk sentiment, and anticipation surrounding important data releases,” said TickMill market analyst Patrick Munnelly.

“The recent decline in US JOLTS job openings raised hopes for potential Federal Reserve rate cuts, further boosting the positive market atmosphere.

“The Nikkei 225 showed notable outperformance, surging and surpassing the 33,000 handle.”

Munnelly noted that its progress was supported by a decrease in the 10-year Japanese government bond yield, which reached its lowest point since August.

“On the other hand, the Hang Seng rose, aligning with the positive market sentiment.

“However, the Shanghai Composite had a more mixed performance, with the mainland market lagging behind.

“The nuanced dynamics were influenced by the ongoing liquidity drainage by the People’s Bank of China and Moody’s negative revision of China’s credit outlook.”

Most bourses rise in regional rebound

In Japan, the Nikkei 225 index jumped 2.04% to reach 33,445.90, while the Topix index also recorded a substantial gain of 1.9%, closing at 2,387.20.

The gains on Tokyo’s benchmark were led by Toppan Printing, which saw an impressive 11.03% increase in its stock price, along with Tokyo Electric Power and Dainippon Screen Manufacturing, which recorded gains of 8.07% and 4.53%, respectively.

Mainland China markets displayed mixed results, with the Shanghai Composite index experiencing a slight decline of 0.11% to reach 2,968.93, while the Shenzhen Component index posted a modest gain of 0.66% at 9,533.25.

Decliners in Shanghai included Harbin Dongan Auto Engine Co and Inly Media, which registered losses of 10.01% and 8.62%, respectively.

Hong Kong’s Hang Seng Index gained 0.83% to close at 16,463.26, led by Lenovo Group, NetEase, and Haidilao International, with increases of 9.7%, 4.56%, and 4.49%, respectively.

South Korea’s Kospi index posted a marginal gain of 0.04%, reaching 2,495.38.

Hybe and SK IE Technology were among the standout performers in Seoul, with respective gains of 7.28% and 4.78%.

Australia’s S&P/ASX 200 index rose by 1.65% to reach 7,178.40, led higher by HMC Capital and EVT with increases of 14.92% and 8.5%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 index also exhibited positive momentum, gaining 0.94% to close at 11,463.49.

Eroad and Serko were among the leading performers, with gains of 3.53% and 2.46%, respectively.

In currency markets, the dollar was last 0.03% stronger on the yen, trading at JPY 147.19.

The greenback meanwhile weakened 0.37% against both the Aussie and the Kiwi, changing hands at AUD 1.5206 and NZD 1.6256, respectively.

On the oil front, Brent crude futures were last down 0.05% on ICE at $77.16 per barrel, while the NYMEX quote for West Texas Intermediate dipped 0.18% to $72.19.

Business sentiment improves in Japan, Australia’s economy expands

In economic news, the Reuters Tankan survey for December showed an improvement in business sentiment among large Japanese firms.

It revealed that sentiment in the manufacturing sector has seen a consecutive increase for two months, primarily attributed to the auto sector’s ongoing recovery from last year’s semiconductor shortage and supply chain challenges.

The sentiment index for manufacturers climbed to +12, marking a significant improvement from the +6 recorded in November.

Additionally, the service sector index stood at +26, slightly down from +27 in November.

A positive figure in the Tankan surveys indicates a prevalence of optimists over pessimists in a sector.

Elsewhere, Australia’s economy demonstrated robust performance in the third quarter, surpassing economists’ expectations.

Gross domestic product (GDP) expanded by 2.1% year-on-year, exceeding the anticipated 1.8% growth rate as per Reuters polling.

The growth rate also mirrored the second-quarter figures.

On a seasonally adjusted, quarter-on-quarter basis, Australia’s GDP registered a 0.2% increase, driven by elevated government consumption and capital investment during the quarter.

However, the Australian Bureau of Statistics also pointed out that household consumption and GDP growth rates had slowed on a quarterly basis due to continued cost-of-living pressures and higher interest rates.

Reporting by Josh White for Sharecast.com.