March 23, 2022
Tech shares surge after claims that Beijing will make concessions on auditing issues, while China shares ended higher on stimulus hopes
Asian stocks notched up more gains on Wednesday with Hong tech firms leading the way as investors applauded Beijing’s possible concession on US audit issues and the end of a criminal case against ZTE in the United States.
Chinese regulators have reportedly asked some of the country’s US-listed firms, including Alibaba, Baidu and JD.com, to prepare for more audit disclosures, as Beijing steps up efforts to ensure domestic companies remain listed in New York.
Hong Kong shares of ZTE Corp soared as trading resumed in the afternoon, after the telecommunications equipment maker completed five years of probation in the US, and finished up more 23% on the day.
Battered e-commerce giant Alibaba, which recently expanded a buyback programme, rose 6.7%, while Pinduoduo saw an eye-catching 18.9% rise and in Tokyo out-of-favour tech investment firm SoftBank Group rose 7%.
The Hang Seng Index ticked 1.21%, or 264.80 points, higher to 22,154.08. The Shanghai Composite Index rose 0.34%, or 11.17 points, to 3,271.03, while the Shenzhen Composite Index on China’s second exchange gained 0.54%, or 11.52 points, to 2,163.20.
Chinese shares were also boosted with investors expecting measures to stabilise the economy after a surge in domestic Covid-19 infections.
Traders are hoping for more easing moves, including possible cuts to banks’ reserve requirements, after assurances of more support by the country’s economic czar Vice Premier Liu He and other policymaking bodies last week.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.71%, while Japan’s Nikkei index closed up 3.0%, extending its winning streak to seven sessions, thanks to overnight US gains and a cheaper yen.
It rose 816.05 points at 28,040.16, while the broader Topix index rose 2.33% or 44.96 points to 1,978.70.
Nifty 50 Retreats
But Indian stocks edged back with Mumbai’s signature Nifty 50 index down 0.40%, or 69.85 points, to close at 17,245.65.
The main US tech index ended up 2% overnight cutting its year-to-date losses to 10% from 20% at mid-March.
World stocks climbed to five-week highs on Wednesday as investors ignored a broadening selloff in global bond markets fuelled by a combination of soaring inflation and hawkish comments from US policymakers.
MSCI’s broadest gauge of world stocks rose 0.2% to a February 17 high, a level last seen days before Russia invaded Ukraine. An Asian gauge rose 1% to its highest since early March.
“It is almost as if the negative impacts of inflation, rising interest rates and the uncertainties of war are no longer of concern,” said Stuart Cole, head macro economist at Equiti Capital, who added that investors were focusing on stocks that could withstand the high inflationary environment.
But many were also focused on action in the bond markets, with two-year US yields pausing for breath at a six-year high after a massive rise this month.
Commodity markets have been kept on edge by anticipated supply disruptions from the war in Ukraine and were firm against a lack of tangible progress toward peace.
Oil steadied at lofty heights, with Brent crude futures up 1% at $116.67 a barrel and US crude up 1% to $110.34.
Key figures around 0820 GMT
Tokyo – Nikkei 225 > UP 3.0% at 28,040.16 (close)
Hong Kong – Hang Seng Index > UP 1.2% at 22,154.08 (close)
Shanghai – Composite > UP 0.3% at 3,271.03 (close)
London – FTSE 100 > UP 0.3% at 7,500.85
Brent North Sea crude > UP 1.3% at $116.92 per barrel
West Texas Intermediate > UP 1.1% at $110.45 per barrel
New York – DOW > UP 0.7% at 34,807.46 (Tuesday close)
- Reuters with additional editing by Sean O’Meara