HONG KONG: Hong Kong led gains in Asian stock markets Wednesday after an official said China will set up a second stock trading link with the city this year while Japan surged on a blockbuster share sale.
Hong Kong’s Hang Seng jumped 3.1 per cent to 23,272.66 and Japan’s Nikkei 225 advanced 2.1 per cent to 19,071.74. The Shanghai Composite Index in mainland China added 2.6 per cent to 3,402.30. South Korea’s Kospi edged up 0.1 per cent to 2,051.35. Australia’s S&P/ASX 200 gained 0.3 per cent to 5,254.30. Markets in Taiwan, India and Southeast Asia also rose.
People’s Bank of China Governor Zhou Xiaochuan, writing in an article posted on the central bank’s website, said that a stock trading link between Hong Kong and mainland China’s second smaller exchange in Shenzhen will be launched this year. The link has been widely anticipated by investors following last year’s opening of Shanghai-Hong Kong Stock Connect. That link gives outsiders wider access to the mainland’s main market through Hong Kong brokers while also allowing wealthy Chinese investors to invest in a market outside the mainland for the first time.
Shares of Japan Post jumped nearly 17 per cent in their first day of trading after the company and its banking and insurance units raised a combined 1.44 trillion yen ($11.9 billion) in the world’s biggest initial public offering of stock this year. The long awaited sale of shares in the state-owned company is the biggest since Chinese e-commerce giant Alibaba Group Holdings raised $25 billion in its IPO in September 2014. The Japan Post sale is meant to tease out some of the more than $14 trillion that Japanese have squirreled away in savings accounts
China shares gained after a survey found that the country’s service industries strengthened last month. The Caixin/Markit purchasing managers index for October rose to 52 from a 14-month low of 50.5 in September, based on a 100-point scale on which numbers below 50 indicate contraction. China’s service industries such as retailing and tourism have helped offset weakness in manufacturing amid a slowdown in the world’s No. 2 economy.
The China services index “shows that previous stimulus policies have begun to take effect, while the economic structure steadily improved,” said He Fan, chief economist at Caixin Insight Group. “The economy has started to show signs of stabilizing, reducing the need for a further stimulus.”
Major U.S. benchmarks ended higher Tuesday as energy companies rallied. The Dow Jones industrial average rose 0.5 per cent to 17,918.15 and the Standard & Poor’s 500 rose 0.3 per cent to 2,109.79. The Nasdaq composite rose 0.4 per cent to 5,145.13.
Benchmark U.S. crude futures slipped 2 cents to $47.88 in electronic trading on the New York Mercantile Exchange. The contract added $1.76 to close at $47.90 a barrel in New York on Tuesday. Brent crude, which is a benchmark for international oils, dipped 4 cents to $50.50 a barrel in London.
The dollar rose to 121.22 yen from 121.11 in the previous day’s trading. The euro weakened to $1.0949 from $1.0961.
