The bulls are back in China with the stock market rallying for a sixth straight day Wednesday to the highest level since the global financial crisis in 2008, on hopes of further stimulus measures from Beijing to rejuvenate the sluggish economy.
Elsewhere in Asia, some markets struggled to shake off concerns ahead of an announcement by the U.S. Federal Reserve Wednesday on its interest-rate outlook.
In Japan, the Nikkei 225 index triumphed 107.48 points, or 0.6%, to 19,544.48, its fifth hike in the last six sessions.
The Hang Seng Index rebounded 218.59 points, or 0.9%, to 24,120.08
In Australia, shares of Fortescue Metals Group Ltd. in Australia plunged 5.3%, after the world’s fourth largest iron ore exporter scrapped a planned $2.5 billion bond sale, surprising investors.
CHINA
The Shanghai CSI 300 added 88.93 points, or 2.4%, to 3,846.06
China’s stock market has been a wild ride in recent months with the rally late last year fueled by a November interest-rate cut — the first in two years — before a correction in January when investors locked in profits and worries grew over a clampdown by Beijing on investors using borrowed money to buy stocks.
But buying has picked up in recent weeks, with enthusiasm in recent days coming after Chinese Premier Li Keqiang said Sunday the government has room, as well as the tools, to step in should growth falter and affect employment. That is fueling expectations for further monetary easing, in the form of cuts in interest rates or banks’ reserve-requirement ratios.
Adding to the positive sentiment, China’s state-owned People’s Daily said in an article Wednesday that the recent rally was due to prospects of further economic reforms and the government’s pro-growth stance. The report cited statistics from the China Securities Depository and Clearing Corporation Ltd. showing new trading accounts on the mainland climbing to 720,800 last week, higher than the historical weekly average of 240,000.
Still, most of the turnover is coming from local "mom-and-pop" investors, while foreign investors have been more bearish.
Meanwhile, China’s yuan hit a two-month high against the U.S. dollar after weeks of severe depreciation pressure as bets that authorities would continue guiding the currency weaker mounted. Investors now say the central bank’s actions signal a preference for a stable currency. The yuan hit 6.2284 against the U.S. dollar, appreciating as much as 0.4% since its previous close.
In other markets
The Taiex index in Taiwan leaped 113.99 points, or 1.2%, to 9,653.43
In Singapore, the Straits Times Index slid 8.20 points, or 0.2%, to 3,361.75
The Kospi index in Korea moved down 1.46 points, or 0.1%, to 2,028.45
In New Zealand, the NZX 50 skidded 58.74 points, or 1%, to 5,846.66
The S&P/ASX index inched up 0.23 points to 5,842.35
