Asian Stocks Gain as China Adopts More Vigorous Fiscal Policy
By Investors Hub
Asian stocks closed broadly higher on Tuesday as investors put trade worries on the back burner and shifted focus to the earnings season.
China’s Shanghai Composite Index jumped 46.02 points or 1.6 percent to 2,905.56 after the country’s central bank injected record liquidity into the banking system via a medium-term lending facility to alleviate funding pressure.
Market sentiment also got a boost after the State Council, China’s cabinet, said the country would adopt a more vigorous fiscal policy to support the economy.
In another development, Beijing said it has no intention to devalue the yuan to help exports. Hong Kong’s Hang Seng Index surged up 406.45 points or 1.4 percent to 28,662.57.
Japanese shares rebounded after sharp losses in the previous session as the yen rally lost steam and data showed the Japanese manufacturing sector continued to expand in July, but at a slower pace.
The Nikkei 225 Index rose 113.49 points or 0.5 percent to 22,510.48 after falling 1.3 percent the previous day. The broader Topix gained 0.5 percent to close at 1,746.86.
Oil refiner Showa Shell Sekiyu climbed 2 percent and surveying equipment maker Ono Sokki soared 6 percent after upbeat earnings forecasts.
Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial rose around half a percent after 10-year U.S. Treasury yields jumped to their highest in five weeks on speculation of a shift in BoJ policy and expectations of further gradual interest rate increases from the Federal Reserve.
Meanwhile, electronic components maker KOA Corp slumped 10 percent after reporting a 3.4 percent drop in second quarter operating profit.
Australian markets rose notably, with the benchmark S&P/ASX 200 Index rising 38.20 points or 0.6 percent to finish at 6,265.80. The broader All Ordinaries Index ended up 35.10 points or 0.6 percent at 6,355.20.
Banks ended on a mixed note, while investment bank Macquarie Group advanced 1.3 percent. Miners BHP Billiton, Rio Tinto and Alumina gained 1-2 percent.
Online retailer Kogan.com slumped 11.8 percent despite the company posting encouraging fourth quarter and full-year earnings results.
A gauge of Australian consumer confidence dropped to 118.9 during the week ended July 22 from 121.5 in the preceding week, a weekly survey compiled by the ANZ bank and Roy Morgan Research showed. The decline was primarily driven by weakening sentiment around current and future economic conditions