March 22, 2022
Alibaba powered Hang Seng’s rise with its share repurchase plan, while China Eastern shares fell after one of its planes crashed on Monday
Asia’s major markets were back on the front foot on Tuesday following a lukewarm start to the week with Hong Kong’s Hang Seng leaping more than 3%.
Hong Kong’s benchmark jumped on e-commerce giant Alibaba’s share repurchase plan as the tech giant’s price soared 11.2%.
The surge came after the company raised its share buyback programme to $25 billion, the largest ever repurchase plan, to prop up its battered shares as it fights off regulatory scrutiny and concerns about slowing growth.
Alibaba’s gains also lifted the Hang Seng Tech index to close 5.37% higher.
However, Chinese blue chips closed marginally lower in some choppy later trade, as investors weighed hawkish comments from US Federal Reserve chairman Jerome Powell.
Powell flagged a more aggressive tightening of monetary policy than previously anticipated, while peace negotiations between Russia and Ukraine were marked by slow progress.
The Hang Seng Index climbed 3.15%, or 667.94 points, to 21,889.28. The Shanghai Composite Index added 0.19%, or 6.18 points, to 3,259.86, while the Shenzhen Composite Index on China’s second exchange dipped 0.41%, or 8.86 points, to 2,151.68.
Shanghai-listed shares of China Eastern Airlines closed 6.15% lower, while those in Hong Kong slipped 2.55%, after a Boeing 737-800 operated by the company with 132 people on board crashed in southern China on Monday.
The crash also sent tourism stocks down by 1.83%. The sector has already been hit by surging domestic Covid-19 cases. Mainland China reported 2,338 confirmed coronavirus cases for March 21, compared with 2,027 a day earlier.
Nikkei and Nifty 50 Rise
Tokyo shares marked a six-day winning streak as the dollar’s strength encouraged investors to pick up exporter shares.
The benchmark Nikkei 225 index climbed 1.48% or 396.68 points to 27,224.11, while the broader Topix index added 1.28% or 24.47 points to 1,933.74.
Indian stocks rose too with Mumbai’s signature Nifty 50 index up 1.16%, or 197.90 points, to close at 17,315.50.
European stock indexes opened slightly higher on Tuesday, while US and European government bond yields rose to new multiyear highs as investors adjusted their expectations for rate hikes after those Fed comments.
“With positioning light, sentiment weak and geopolitical risks likely to ease over time, we believe risks are skewed to the upside,” JPMorgan strategists wrote in a note to clients.
JPMorgan said that 80% of its clients plan to increase equity exposure, which is a record high.
Ukraine Conflict Continues to Weigh
“We believe investors should add risk in areas that overshot on the downside such as innovation, tech, biotech, EM/China, and small caps. These segments are pricing in a severe global recession, which will not materialise, in our view.”
The conflict in Ukraine continued to weigh on sentiment. US President Joe Biden issued one of his strongest warnings yet that Russia is considering using chemical weapons.
Oil prices continued to rise overnight following news that some European Union members were considering imposing sanctions on Russian oil – although Germany said that the bloc was too dependent on Russian oil and gas to be able to cut itself off.
But prices dropped around 0800 GMT, with Brent crude futures down 0.9% on the day by 0916 GMT and West Texas Intermediate futures down 0.7%.
In cryptocurrencies, bitcoin was up 3.6% at around $42,515.
Key figures around 0810 GMT
Tokyo – Nikkei 225 > UP 1.5% at 27,224.11 (close)
Hong Kong – Hang Seng Index > UP 3.2% at 21,889.28 (close)
Shanghai – Composite > UP 0.2% at 3,259.86 (close)
London – FTSE 100 > UP 0.4% at 7,473.88
Brent North Sea crude > UP 1.7% at $117.59 per barrel
West Texas Intermediate > UP 1.0% at $113.29 per barrel
New York – DOW > DOWN 0.6% at 34,552.99 (Monday close)
- Reuters with additional editing by Sean O’Meara