Asia report: Stocks boosted by reopening of Hong Kong-China border
Markets were in the green in the Asia-Pacific region on Monday, as sentiment was boosted by the reopening of the border between mainland China and the Hong Kong special administrative region.
In Japan, traders were enjoying a long weekend for the Coming of Age Day holiday, as the yen weakened 0.31% against the dollar to last trade at JPY 132.49.
On the mainland, the Shanghai Composite was up 0.58% at 3,176.08, and the technology-heavy Shenzhen Component was 0.73% firmer at 11,450.15.
Fresh data out of Beijing showed China’s foreign currency reserves rising slightly less than anticipated in December.
According to the State Administration of Foreign Exchange (SAFE), reserves totalled $3.128trn at the end of December.
That was up from $3.117trn at the end of November, but lower than consensus expectations for $3.15trn.
Duncan Wrigley at Pantheon Macroeconomics noted that a smaller currency valuation effect of -$2.5bn in December, compared to $24.3bn in November, accounted for “roughly half” of the slower rate of growth in reserves.
“This is simply a function of a stronger dollar index, rising 2.8% against a basket of currencies in December, after falling 2.3% in November,” he said.
“SAFE also said that falling global financial asset prices were a factor.”
Wrigley said China was likely to see a “reopening rebound” from the second quarter onwards, led by consumption and private investment, with “green shoots already sprouting” in larger cities - the first to weather the Covid-19 exit waves.
“In Beijing, Avatar 2 appears to be a hit show, with moviegoers queuing to see the film, which took about 50% of the national box office on 1 January.
“Major shopping malls in the capital city saw significantly higher footfall over the weekend, albeit still short of pre-pandemic levels.”
South Korea’s Kospi jumped 2.63% to 2,350.19, while the Hang Seng Index in Hong Kong was ahead 1.89% at 21,388.34.
Chinese technology giant Alibaba Group was among the leading gainers, closing up 8.66% after reports emerged that Jack Ma was ceding control of fintech firm Ant Group.
Alibaba, which was also founded by Ma, owns a third of Ant Group and counts it as a financial affiliate.
Tech plays in general were in the green in Hong Kong, with NetEase up 2.57% and Tencent Holdings rising 3.61%.
Casino operators joined the rally as well as quarantine-free travel between the mainland and the autonomous city-region, with MGM China up 3.14%, Sands China ahead 3.7%, SJM Holdings 3.42% firmer, and Wynn Macau jumping 4.68%.
A number of consumer stocks rounded out the positive investor mood, with ANTA Sports Products - the world’s biggest sports equipment maker - up 2.96%, while Budweiser Brewing Company APAC gained 0.37%.
Hotpot restaurant chain Haidilao International Holding leapt 5.64%, and fast food group Xiabu Xiabu Catering Management surged 6.47%.
The blue-chip technology stocks were in the green in Seoul, meanwhile, with Samsung Electronics up 2.88% and SK Hynix ahead 3.49%.
Oil prices were in the green at the end of the Asian day, with Brent crude futures on ICE last up 2.85% at $80.81 per barrel, and the NYMEX quote for West Texas Intermediate rising 3.1% to $76.06.
In Australia, the S&P/ASX 200 rose 0.59% to 7,151.30, as investors digested a worst-than-expected data print on construction approvals.
According to the Australia Bureau of Statistics, the number of total dwellings given the sign-off in November dropped by a seasonally-adjusted estimated 9% month-on-month.
That was significantly faster than the 1% decline analysts polled by Reuters had pencilled in.
Australia’s official statistics office said approvals of private-sector houses were down 2.5%, while private-sector dwellings excluding houses tumbled 22.7%.
It also said that the value of total buildings declined 1.5%, while the value of non-residential buildings grew by 2%, reflecting a fall in house prices in the sunburnt country.
Share prices for Australia’s big-four lenders were mixed but little changed in Sydney trading, with ANZ Group Holdings up 0.21%, Commonwealth Bank of Australia ahead 0.14% and National Australia Bank 0.81% firmer, while Westpac Banking Corporation slipped 0.13%.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 managed gains of 0.18% to 11,646.45, with the healthcare sector in focus as EBOS Group rose 0.88% and Fisher & Paykel Healthcare 0.85% firmer.
AFT Pharmaceuticals pared earlier gains to close flat in Wellington, meanwhile, after telling shareholders it was expecting growth in the Australian market with a new sinus and pain treatment, and medicated hot drink products.
The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.56% at AUD 1.4460, and the Kiwi advancing 0.6% to NZD 1.5662.
Reporting by Josh White for Sharecast.com.