Kristian Rouz — Most Asian stock markets posted moderate gains on Wednesday after a six-day sell-off, buoyed by the previous day’s rally on Wall Street, and the soon prospect of rising borrowing costs in the US, promising better profitability to the Asian exporters of manufactured goods.
MSCI’s broader index of APEX shares outside Japan rose 0.4% as Beijing’s recent vows to buy shares in order to ensure stability in the mainland’s markets encouraged investors, in turn stirring hopes that the Chinese authorities might actually be able to prevent an across-the-board financial meltdown in the world’s second biggest economy and also the second-biggest commodities consumer. Certain raw materials, like copper, rebounded slightly, though commodity prices are still at their multi-year lows.
The Australian-based mining, petroleum and metals enterprise, BHP Billiton Ltd, rose 2.1%, while the Aussie S&P/ASX 200 Index rose 0.7% on the improved commodities outlook.
The Shanghai Composite Index rose 3.4%, regaining some ground after the four-day rout, during which the index shed some 10%. Trading volumes in Shanghai were low, 26% below last month’s average, with little new stock investors, the total amount at its record lowest, and margin debt at its four-month lowest. Although risk factors to the Chinese stock market have shrunk significantly, the situation is still far from being safe with severe regulations, limiting trading volumes and selling bets, still in place.
Hong Kong’s Hang Seng Index rose 0.5% propelled by the rally on the mainland, ending its three-day decline at the close. China Enterprises Index rose 0.9%. PetroChina and the energy sector in general led the gains, with the oil company adding 2.8%. The mainland’s state-owned Kunlun Energy rose 3.8% in Hong Kong.
In India, the S&P BSE Sensex Index added 0.5%, while Korea’s Kospi Index dropped 0.1%. In the Republic of China, the Taiex Index shed 0.2%, and the Kiwi NZX 50 Index added 0.4%. Generally, commodities gained, while tech-driven stocks were subject to market correction ahead of news from the US.
However, oil prices extended their rout as the global oversupply still lingers without any sign of acceleration of global growth, usually suggesting an increased demand for fuel. In the US, crude dropped another 0.6% to $47.69/bbl as America’s oil inventories are estimated to have added some 850,000 bbl last week. A report from the EIA to confirm or rebuff the estimate will arrive later on Wednesday.
Copper rose 0.6% as global supply dropped. Gold was little changed, at $1,095.30/oz.
