Asia report: Stocks rebound as new Covid cases fall in China

In Japan, the Nikkei 225 was down 0.48% at 28,027.84, as the yen strengthened 0.65% on the dollar to last trade at JPY 138.04.

Tech investing giant SoftBank Group was down 1.37%, while robotics specialist Fanuc eked out gains of 0.07% and Uniqlo owner Fast Retailing added 1.74%.

The broader Topix index was 0.57% weaker by the end of trading in Tokyo, settling at 1,992.97.

Fresh data released earlier in the session showed Japan’s unemployment rate remaining stable month-on-month in October at 2.6%, which was still slightly higher than the 2.5% economists polled by Reuters had pencilled in.

The jobs-to-applicant ratio was meanwhile 1.35, meaning there were still more jobs open than applicants as the labour market remained tight.

Elsewhere, retail sales across Japan were up 4.3% year-on-year in October, marking the first softening in retail sales growth since June.

That was also below the 5% rise in sales anticipated by Reuters polling.

On the mainland, the Shanghai Composite was 2.31% firmer at 3,149.75, and the technology-centric Shenzhen Component added 2.4% to 11,089.01.

Sentiment in the greater China region was boosted by the first fall in the official daily Covid-19 infection count in more than a week.

Beijing reported a total of 38,421 mostly asymptomatic new infections, down from the record 40,052 on Sunday, with no new deaths.

There were no further reports of protests on Tuesday, after images emerged over the weekend and on Monday of civil action apparently in reaction to China’s ongoing, controversial zero-Covid policy, which sees harsh lockdowns implemented in response to new outbreaks of the virus.

A health official said harsh lockdowns and localised measures, such as the reported barricading of residents in apartment blocks without notice, was “wrongful” and should not be used as long-term strategies.

“Long-term lockdown will not only impact the general public’s normal life and work - it can easily trigger anxiety and such wrongful practices must be addressed and avoided,” said National Disease Control and Prevention Administration official Cheng Youquan at a media conference.

On the vaccination front, meanwhile, authorities in China said 65.8% of its citizens aged over 80 had now received their booster shot, compared to the 40% figure recorded on 11 November.

South Korea’s Kospi gained 1.04% to 2,433.39, while the Hang Seng Index in Hong Kong surged 5.24% to 18,204.68.

The blue-chip technology stocks were on the front foot in Seoul, with Samsung Electronics up 0.83% and SK Hynix rising 0.72%.

“China and its covid response are driving the headlines,” said Neil Wilson at Markets.com.

“The Hang Seng led a charge for Asian equities overnight, after Chinese health officials encouraged the elderly to get vaccinated - no big changes, but they cannot reverse it all at once; getting the elderly vaccinated is job one.”

Wilson said there was unease over supply chain implications from ongoing restrictions and rising cases, and concern about what protests against the government could mean for risk.

“But there is also a sense that the direction of travel can only be towards easing restrictions sometime in the new year.

“When exactly that will be depends on many things, not least the pace of vaccinations, but it seems likely the regime will have to relent at some point.”

Oil prices were in the green as the region went to bed, with Brent crude futures last up 3.07% on ICE at $85.74 per barrel, and the NYMEX quote for West Texas Intermediate ahead 2.67% at $79.30.

In Australia, the S&P/ASX 200 managed gains of 0.33% to 7,253.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.77% higher at 11,395.35.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 1.3% at AUD 1.4841, and the Kiwi advancing 1.26% to NZD 1.6021.

Reporting by Josh White for Sharecast.com.