Australia led most Asian markets higher, snapping six-straight days of losses, though Chinese blue-chip stocks dragged on mainland shares.
Markets in Japan were shuttered for holiday
In Hong Kong, the Hang Seng recovered 198.39 points, or 0.9%, to 22,568.43
Broadly, the region recovered from losses Monday after two gauges of Chinese factory activity signaled a contraction in October.
Despite China’s bleak outlook and cratering commodities prices, Australia’s central bank kept its cash rate target unchanged at a record low of 2.0%, as expected, citing firmer prospects for domestic economic growth.
The Australian dollar dropped immediately after the decision to as low as $0.7144 U.S. but later rebounded to trade near the highs of the day. The currency was last up 0.9% at $0.7205 U.S., near its strongest in four days, compared with $0.7143 U.S. late in Asia Monday.
Meanwhile, shares in Australia recovered from their sharpest percentage drop in more than a month on Monday. The S&P/ASX 200 lost 1.4% the previous session on worries about the financial sector. Some banks warned that future earnings results might look less rosy because of regulations requiring higher capital levels, increased competition and a rise in bad-debt levels.
Though Australia’s financial sector has been posting losses for more than a week, Evan Lucas, a market strategist at IG, said that banks in Australia have had a decent reporting season and that Monday’s selloff in financial stocks was overdone.
Consumer-discretionary stocks gained, as retailers are expected to benefit from a longer period of low interest rates. Electronics retailer Dick Smith Holdings Ltd. rose 7.1%, kitchen-appliance producer Breville Group Ltd. closed 3.3% higher and Domino’s Pizza Enterprises Ltd. gained 3.2%.
While the Reserve Bank of Australia left rates steady, analysts said the central bank may need to cut soon amid stronger headwinds to economic growth. Swap-market pricing continues to indicate a 100% likelihood of a cut by February.
Japan Post Holdings Co. will launch its initial public offering on Wednesday, when markets reopen. The deal is the country’s largest privatization in decades, offering investors a chance to buy into a company with more than $2 trillion U.S. in assets.
CHINA
The CSI 300 in Shanghai dropped 10.47 points, or 0.3%, to 3,465.49.
Retailer Ningbo Zhongbai Co. and garments seller Nanjing Central Emporium Stocks Co. were among the worst performing in their sector, falling 5.9% and by the 10% maximum daily limit, respectively in Shanghai.
While Chinese manufacturing data released earlier this week showed activity contracted in October, the readings hinted at improvement.
Shanghai-listed Deluxe Family Co. and Daheng New Epoch Technology Inc. plunged by the maximum daily 10% allowed by regulators for the second straight day. Both stocks were held by Ze Xi Capital, whose chief executive was arrested by authorities for alleged illegal trading, and had risen by the maximum 10% on several trading sessions in the recent past.
In other markets
The Kospi index in Korea gained 13.16 points, or 0.7%, to 2,048.40
Taiwan’s Taiex index strengthened 98.42 points, or 1.1%, to 8,713.19
In Singapore, the Straits Times Index regained 25.15 points, or 0.9%, to 2,999.56
The NZX 50 recouped 38.13 points, or 0.6%, to 6,021.97
The ASX 200 recovered 73.47 points, or 1.4%, to 5,239.22
