Chinese shares surged Thursday as dealers returned from a week-long break that saw a global advance, but a regional rally mostly petered out, with Tokyo ending a six-day winning streak.
The AFP reported that most emerging market currencies retreated in the afternoon, with traders picking up profits as a rally over the past week – fuelled by waning expectations of a US interest rate – ran out of steam.
Shanghai’s composite index was the stand-out performer, having been closed when a below-forecast US jobs report dented the Fed’s plans to tighten monetary policy and Beijing unveiled targeted stimulus measures.
Talk that US borrowing costs would be maintained at record lows for a little longer has put a fire under global markets this week, having been pressured by fears about narrower investment opportunities.
“During the National Day holiday, regional markets including Hong Kong, and the United States have all gone up, which had a major positive impact,” Zhang Qi, an analyst from Haitong Securities, told AFP.
This month has seen a broadly strong advance across global markets after they suffered one of their worst quarters in years, battered by the US rate fears as well as concerns over China’s struggling economy.
Shanghai ended 2.97 per cent higher, with investors cheered by the release last Thursday – the first day of the market holiday – of a report showing factory activity in China had improved slightly in September.
Over the past week the government has also unveiled a series of small measures to try to bring an end to the country’s economic malaise. Among them were a passenger-vehicle purchase tax and a lowering of property down-payments for the first time in five years.
“Investors seem to be expecting more policy stimulus to come through this quarter,” Ronald Wan, chief executive at Partners Capital International in Hong Kong, said.
But he warned: “There’s some turnaround in sentiment but investors’ confidence will fade easily if the economy doesn’t recover as expected and increases the market’s volatility.”
While Shanghai advanced, other regional markets’ rallies ran out of steam. Tokyo closed 0.99 per cent down and Hong Kong closed 0.71 per cent – having surged more than three per cent Wednesday.
Taipei and Wellington also ended in negative territory.
Source : Punch