Stocks in Hong Kong and Australia posted solid gains Wednesday as a positive lead from Wall Street helped a rebound from recent losses, but shares traded in Shanghai extended losses on lingering worries about high interbank money market rates.
In Japan, the Nikkei 225 gave up 135.33 points, or 1%, to 12,834.01, as the yen strengthened and concerns over credit conditions in China persisted.
Hong Kong’s Hang Seng Index flourished 482.83 points, or 2.4%, to 20,338.55, returning back above the 20,000-point level.
Lenders were mostly higher in Hong Kong, however, with the locally listed shares of ICBC and China Minsheng jumping 6.8% and 6.4%, respectively.
In Japan, shares of several exporters gave up early gains to retreat as the U.S. dollar weakened amid losses in Shanghai.
Shares of Fanuc Corp. dropped 1.6%, Hitachi Construction Machinery Co. shed 2.1%, and Mazda Motor Corp. fell 1.1%.
Softbank Corp., which had also jumped earlier in the day on news that Sprint Nextel Corp. shareholders had voted in favour of the company’s takeover offer, retreated in a downbeat market, ended 0.2% lower.
But shares of some Japanese banks rose on a Nikkei newspaper report they planned to raise mortgage rates for a third consecutive month in July.
Mitsubishi UFJ Financial Group Inc. advanced 0.5%, and Sumitomo Mitsui Financial Group Inc. gained 0.6%.
Miners rebounded in Sydney, with BHP Billiton Ltd. rising 2.6%, and Fortescue Metals Group Ltd. climbing 2.4%, although both stocks were off the day’s highs
CHINA
The Shanghai Shenzhen CSI 300 added 2.88 points, or 0.1%, to 2,168.30
The drop Wednesday came as interbank money market rates in Shanghai remained at elevated levels.
The rate on the seven-day weighted average repurchase agreement eased to 7.17% early on Wednesday from Tuesday’s close at 7.44%, while the overnight repo rate fell to 5.51% from 5.83%, according to a Dow Jones Newswires report.
Both rates, however, remain above the levels seen up until the end of May, even after a People’s Bank of China official said the central bank will guide interest rates to a "reasonable range."
Still, analysts remained confident the high borrowing costs in Chinese interbank markets would decline by mid-July.
Several banks traded lower in Shanghai, with Industrial & Commercial Bank of China Ltd. sliding 5.6% as the stock traded without rights to a dividend, while China Minsheng Banking Corp. dropped 1.7%.
In other markets;
Taiwan’s Taiex Index recovered 121.57 points, or 1.6%, to 7,784.80
Singapore’s Straits Times Index gained 14.47 points, or 0.5%, to 3,104.40
Korea’s Kospi Index eked up 2.82 points, or 0.2%, to 1,783.45
In New Zealand, the Exchange 50 Gross Index picked up 76.61 points, or 1.8%, to 4,393.61
In Australia, the S&P/ASX 200 added 75.76 points, or 1.6%, to 4,731.72
