Stocks in Shanghai jumped nearly 5% Wednesday, while most other markets in the region climbed back from their lowest levels in years ahead of the U.S. Federal Reserve’s interest-rates decision.
In Japan, the Nikkei 225 index added 145.12 points, or 0.8%, to 18,171.60, rallying from a seven-month low on Sept 8.
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In Hong Kong, the Hang Seng Index rallied 511.43 points, or 2.4%, to 21,966.66, putting the benchmark up 6.7% from its close on Sept. 7, which had been its lowest since July 2013.
Australia’s S&P/ASX 200 was up 1.6%, having hit its lowest level in nearly two years on Aug. 24. South Korea’s Kospi gained 2%, bouncing back from its lowest level in more than two years, also on Aug. 24.
The Australian dollar was last at $0.7140 U.S., near its highest level in roughly two weeks.
CHINA
The CSI 300 in Shanghai hiked 157.02 points, or 5%, to 3,309.25, amid rumours that securities firms might not have to close down accounts belonging to trust funds.
In China, Zhang Gang, strategist from Central China Securities, said rumors about trust fund accounts was a key driver of gains, as it eased investor concern over the forced liquidation of illegal margin loan accounts.
Sina.com, a widely read news portal in China, reported that a notice sent by brokerage GF Securities to a trust firm called Zhongrong International Trust Co. said Zhongrong would still be able to trade on its platform. That alleviated worries that brokerages are aggressively clearing out illegal margin trading accounts, many of which are believed to belong to trust firms.
Authorities have been closing illegal margin trading accounts and estimate 2,000 such accounts with a combined market cap of around $29.5 billion U.S. Analysts say the actual size of those funds is larger.
Such borrowing had allowed local investors to bid up the market quickly in the yearlong rally leading up to China’s market peak in June.
One trader from a major brokerage, who declined to be named, said the article signaled that China’s stock regulator may decide to halt its efforts on clearing such accounts.
Analysts had expected authorities to clear out such accounts by the end of the month.
An investigation by Chinese police into signs of what they term "abnormal trading" has also put a chill on China’s markets. Authorities on Tuesday stepped up pressure on the country’s largest and most globalized brokerage, Citic Securities Co., by announcing expansion of a probe into possible insider trading by senior executives at the firm, including its president.
China has ramped up spending in recent months as the country shows more signs of weakness. More than 40% of investors now see weak growth in China and other emerging markets as the main risk to financial markets over the next 12 months, according to a survey published by Barclays on Tuesday.
In other markets
In Korea, the Kospi index jumped 37.89 points, or 2%, to 1,975.45
In Singapore, the Straits Times Index gained 26.80 points, or 0.9%, to 2,868.74
In Taiwan, the Taiex index recovered 73.3 points, or 0.9%, to 8,333.29
The NZX 50 picked up 15.58 points, or 0.3%, to 5,667.97
The ASX 200 Index moved higher 80.42 points, or 1.6%, to 5,098.86
