Shares in China and Hong Kong led the region higher Thursday as fresh signs of reform boosted Chinese state-owned firms.
The Nikkei 225 index recovered 205.9 points, or 1.2%, to 18,096.90
The Hang Seng index in Hong Kong screamed higher 448.26 points, or 2%, to 22,888.17, as investors welcomed news that China’s plans to consolidate its shipping sector are progressing.
Markets elsewhere gained as expectations build that the Federal Reserve will delay raising interest rates after disappointing U.S. economic data.
News of early-stage merger talks between two shipping companies— China Merchants Energy Shipping Co. and Sinotrans & CSC Holdings Co. —boosted listed shares of the firms in Hong Kong and Shanghai.
Hong Kong-listed units of Sinotrans—Sinotrans Ltd. and Sinotrans Shipping Ltd— were up 7% and 1.2%, respectively. China Merchant Group’s Shanghai listing, China Merchants Energy Shipping Co., was up 4.9%.
That adds momentum to the shipping sector, as merger talks to create what would be the world’s fourth-largest container operator from the groups’ container-shipping units move to advanced stages. Shares of the Hong Kong-listed units of the firms involved—China Ocean Shipping Co., or Cosco Group, and China Shipping Group Co.—have remained suspended since Aug. 10.
Asian markets also rose amid hopes that borrowing costs would remain lower for longer, and that the Fed’s delay would slow capital flight from emerging markets. Both factors helped offset worries earlier this week about China’s ability to meet its year-end growth target, after weak trade and inflation data.
Overnight, soft readings on consumer spending, inflation and jobs in the U.S. bolstered the case for the Federal Reserve to hold off from raising interest rates in coming months and battered the U.S. dollar. Futures-markets traders now see almost no chance of a rate increase this month and a one-in-three probability of a move by year-end.
In Australia, the local dollar was up 0.4% against the U.S. dollar, after the unemployment rate came in at 6.2% in September, unchanged from a month earlier and within expectations.
The South Korean won traded up 0.8% against the U.S. dollar, after the country’s central bank held its base interest rate steady at a record low of 1.50%. Most analysts expected the outcome, although pressure has been mounting on the Bank of Korea to ease policy after two rate cuts earlier this year have done little to alleviate dismal exports and weak demand at home.
Growing speculation that Japanese authorities will introduce additional stimulus to support the flagging economy boosted the Nikkei. The Japanese government recognized some areas of "weakness" while maintaining the view that the economy is recovering moderately in a monthly report for October published Thursday.
In Hong Kong, shares of China Unicom (Hong Kong) Ltd., China Telecom Corp. Ltd. and China Mobile Ltd. rose as much as 4.8%, 3.7% and 3.1%, respectively. The three firms jointly own China Tower Corp., which is expected to buy roughly 63.09 billion yuan ($9.94 billion U.S.) worth of tower assets from China Unicom, the company said after trading hours Wednesday.
China Unicom and China Telecom closed down 2.8% and 0.5% while China Mobile remained up 2.7%.
In other markets
The CSI 300 in Shanghai jumped 80.7 points, or 2.4%, to 3,486.82
The Kospi index in Korea gained 23.72 points, or 1.2%, to 2,033.27
Taiwan’s Taiex index reacquired 79.01 points, or 0.9%, to 8,601.52
In Singapore, the Straits Times Index regained 31.22 points, or 1.1%, to 3,015.14
The NZX 50 gained 48.58 points, or 0.9%, to 5,775.71
The ASX 200 Index took on 32.79 points, or 0.6%, to 5,230.05
