Shares in China led Asian markets higher Wednesday, boosted by speculation that Chinese authorities will open a trading link between Shenzen and Hong Kong by year-end.
The Nikkei 225 returned from holiday big time, adding 243.63 points, or 1.3%, to 18,926.91, as shares of state-owned Japan Post Holdings Co. and its financial units jumped more than 15% in their trading debut.
The initial public offering of the listings together mark the world’s biggest since the debut of Alibaba Group Holding Ltd. in September 2014.
The Nikkei was also catching up with gains in most of the region on Tuesday, when Japan markets were closed for a holiday.
In Hong Kong, the Hang Seng spiked 485.14 points, or 2.1%, to 23,053.57
Hong Kong’s exchange operator, Hong Kong Exchanges & Clearing Ltd., was up 4.7%. Hong Kong-listed mainland brokerages also rose sharply, led by Shenwan Hongyuan (H.K.) Ltd. which gained 8.6%
The rally comes after China’s central bank published an article on its website Tuesday, citing Gov. Zhou Xiaochuan saying that China will unveil the Shenzhen-Hong Kong Stock Connect this year.
Shares of HKex pared gains after trading up as much as 9%, although Chinese markets stayed sharply higher, after the central bank later clarified that Zhou had made the comments in May.
Some analysts were skeptical that the authorities could start new trading link in a few weeks time in line with Zhou’s remarks.
In a bid to calm the market, HKex said midday Wednesday that plans for the link still need regulators’ approval and no deal has been made.
Still, shares of Chinese brokerages jumped in Hong Kong, including Citic Securities Co., up 9.2%, GF Securities Co., up 6.4% and Haitong Securities Co., up 8.6%.
Elsewhere, Australia’s S&P/ASX 200 edged up, as signs of weakness in parts of the local economy offset a rally in energy stocks, which gained after an overnight surge in oil prices. The benchmark had been up as much as 1.4% earlier Wednesday, but receded after data
In Japan, the government agency that has been delivering mail in Japan since the 19th century, began trading earlier, jumping 26% from its pre-market IPO price of ¥1,400. Japan Post is tapping the value of its portfolio by selling 11% of its shares, while its holding company is selling 11% of the shares of its banking and insurance units.
Shares of Japan Post Bank and Japan Post Insurance, also debuting today, were up 15% and 56%, respectively, above their IPO prices.
Interest from retail investors, lured by the high dividend yield and familiar name, underpinned the strong stock-market reception. Last month, the offerings were priced at the top of their proposed range.
The news bodes well for Prime Minister Shinzo Abe, who is counting on a successful listing to persuade Japanese investors to rotate more of their bank savings into stocks.
Shares of Takata Corp. were down 13% after the air-bag maker agreed to accept a $70-million U.S. fine and an outside monitor under a proposed settlement with the top U.S. auto-safety regulator over reporting lapses involving rupture-prone air bags.
Honda Motor Co. said in a statement Tuesday that it won’t use any Takata Corp.-made driver or front passenger side air bag inflaters world-wide in new Honda and Acura vehicles now being developed. Honda is Takata’s biggest customer.
Shares of Honda ended up 1.9%. After Japan markets closed, the firm posted a 6.9% increase in its net profit for the July-to-September period, as solid vehicle sales in the U.S. offset weak car sales in Japan.
Shares in the region started the day broadly higher, after signals the European Central Bank stands ready to take more accommodative action. In October, President Mario Draghi had said the central bank might announce further measures as soon as December.
CHINA
The CSI 300 in Shanghai leaped 163.05 points, or 4.7%, to 3,628.54
In China, news about a second connect program comes nearly a year after the launch of the Shanghai-Hong Kong Stock Connect, which allowed a broader swath of foreign investors to buy Shanghai shares through Hong Kong, instead of just professional fund managers.
A private gauge of China’s services activity, released earlier Wednesday, which rose to 52.0 in October from 50.5 the previous month. The 50-level distinguishes expansion from contraction in activity.
On Tuesday, President Xi Jinping suggested Beijing could tolerate growth as low as 6.5%, according to the official Xinhua News Agency. It was the strongest signal yet that the government expects the world’s second-largest economy to shift to a slower pace.
In other markets
The Kospi index in Korea gained 4.37 points, or 0.2%, to 2,052.77
Taiwan’s Taiex index strengthened 143.83 points, or 1.7%, to 8,857.02
In Singapore, the Straits Times Index regained 40.92 points, or 1.4%, to 3,040.48
The NZX 50 jumped 49.24 points, or 0.8%, to 6,071.21
The ASX 200 nicked up 3.08 points, or 0.1%, to 5,242.29
