Asia report: Most markets rise despite Evergrande liquidation order

Most markets in the Asia-Pacific region displayed positive trends today, as investors closely monitored developments in Hong Kong.

The focal point of the day was the suspension of trading in Evergrande's shares, following a court order to liquidate the troubled Chinese property developer.

“Over the weekend, news emerged that China's securities regulator would halt the lending of certain stocks for short selling starting today,” said TickMill market analyst Patrick Munnelly.

“Initially, this led to a rise in equities across China and Asia.

“However, optimism quickly faded, and stocks eased back, with Chinese markets mostly in the red with worries about the real estate industry front and centre, as China's decision to wind up Evergrande has raised the prospect of contagion risk.”

Most markets in the green despite Evergrande turmoil

In Japan, the Nikkei 225 index gained 0.77% to close at 36,026.94, while the Topix index saw a more substantial increase of 1.27%, ending at 2,529.48.

Leading the gainers on Tokyo’s benchmark was Nitto Denko, up 5.2%, followed by Mazda Motor, rising by 4.35%, and Inpex, posting a 4.11% gain.

Conversely, China's markets were in the red, as the Shanghai Composite declined 0.92% to settle at 2,883.36, and the Shenzhen Component dropped 2.06%.

Arcplus Group and Anhui Xinli Finance recorded significant losses of 10.06% and 10.03% in Shanghai, respectively.

Hong Kong's Hang Seng Index managed to eke out a 0.78% gain, reaching 16,077.24.

Standout performers in the special administrative region included Budweiser Brewing Company, rising by 6.58%, Citic Pacific, with a 4.32% increase, and China Mengniu Dairy, up 4.29%.

South Korea's Kospi index showed resilience with a gain of 0.89%, closing at 2,500.65.

E-Mart and Kogas were among the top performers, posting substantial gains of 15.24% and 11.44%, respectively.

In Australia, the S&P/ASX 200 index edged up by 0.3% to finish at 7,578.40, led higher by Bapcor and Bellevue Gold, with gains of 5.88% and 5.41%, respectively.

New Zealand's S&P/NZX 50 index also saw positive movement, increasing by 0.31% to reach 11,911.89.

Notable performers in Wellington included Investore Property, which rose by 3.42%, and Chorus, posting a 2.86% gain.

In currency markets, the dollar was last down 0.19% on the yen, trading at JPY 147.87.

The greenback also declined 0.42% against the Aussie to AUD 1.5145, while it recorded a 0.49% drop on the Kiwi, changing hands at NZD 1.6340.

Oil prices showed modest gains, with Brent crude futures last up 0.18% on ICE to $83.70 per barrel, and the NYMEX quote for West Texas Intermediate increasing 0.18% to $78.16.

Evergrande in focus as court orders its liquidation

In a significant development on Monday, Hong Kong-listed shares of Evergrande saw a sharp decline of 12.2% during early trading, before they were halted.

The downturn came as a result of a Hong Kong court's decision to order the liquidation of the beleaguered Chinese real estate developer.

Once a prominent player in China's real estate sector, Evergrande had grappled with financial woes and has become entangled in Beijing's ongoing debt crisis in recent years.

The company, deemed the world's most indebted property developer, faced a default in 2021 and subsequently announced an offshore debt restructuring initiative in March of the same year.

According to the Wall Street Journal, Evergrande's overseas creditors failed to reach a last-minute deal over the weekend to restructure its debt.

Elsewhere, Singapore’s Monetary Authority (MAS) made its first quarterly monetary policy decision of 2024 by opting to maintain the status quo.

As widely anticipated, the central bank left its exchange rate policy band, known as the Singapore dollar nominal effective exchange rate, unchanged.

In its policy statement, MAS emphasised its commitment to closely monitoring both global and domestic economic developments while remaining vigilant about potential risks to inflation and growth.

The central bank expressed optimism regarding Singapore's economic prospects for the year, projecting a GDP growth range of 1% to 3% in 2024.

Additionally, MAS anticipated an uptick in core inflation for the current quarter, attributing it in part to the one-off impact of the 1%-point increase in goods and services tax (GST) that took effect on 1 January.

Reporting by Josh White for Sharecast.com.