BEIJING: Stocks in Asia edged higher Tuesday on the tail of strong corporate earnings in the U.S. and China’s stabilizing markets.
The Shanghai Composite Index SHCOMP, +0.82% ticked 0.3% higher to 4002.64 in midday trading, after closing up 0.9% on Monday. Gaining for the fourth-straight session, the index has bounced 14% from its recent low on July 8 but is still off 22.5% from its June 12 peak.
The smaller Shenzhen index 399106, +1.76% increased 0.9% to 2250.76, a day after rising 1.8%.
The Hang Seng Index HSI, +0.56% climbed 0.4% to 25507.76 and was roughly flat on Monday on low trading volumes.
All three indexes opened lower Tuesday but turned higher by midmorning, continuing a recent trend that has seen investors buy up shares over the course of the day.
“China bears can argue that the Chinese regulators have effectively taken the market out of consideration by virtue of the ham-fisted approach to reversing the selloff,” analysts at Alliance Bernstein wrote in a research note Tuesday, but the bulls can argue that the Shanghai Composite is still up more than 90% over the past 12 months.
The firm said “we would avoid the Shanghai market for now” given its volatility and the unpredictability of China’s stock regulator in handling it.
The Shanghai Composite trades at 16.3 times forward earnings, compared with 16.1 times for the S&P 500, but excluding the overrepresentation of low growth financials, the Shanghai benchmark trades at a much higher 26 times, Alliance said.
