Asian Investors React Mildly To China’s Approval Of Stock-Trading Link

Andy Parker
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Asian Investors React Mildly To China’s Approval Of Stock-Trading Link

Trading in Asian stocks was largely mixed Wednesday despite China’s move to approve the Shenzhen- Hong Kong trading link. Once opened, the trading link will make it easier for investors in Shenzhen to invest in Hong Kong stocks and vice versa.

Though a date for when the link will open has not been announced, it seems the approval of the link is something that many investors had already priced into their valuation of China and other stocks in the Asian region.

“The market may enter a moderate correction period since the good news has been exhausted in the short term,” observed Zhang Xin of Guotai Junan Securities.

How major indexes in Asia fared

Stocks in Tokyo gained, with the Nikkei 225 (INDEXNIKKEI:NI225) advancing 0.90%. The index was led up by rising stocks in Japan’s Chemical, Petroleum & Plastic, Insurance and Mining sectors.

A weaker yen also boosted foreign interest in Japanese stocks. USDJPY rose 0.65% to 100.95, while EURJPY edged up 0.49% to 113.67.

Stocks in Taiwan backed the trend in Japan, as the Taiwan Weighted rose 0.08%. The index was lifting by rising stocks in Taiwan’s Glass, Oil, Gas & Electricity and Construction sectors.

Asian losers

But stocks in South Korea and China lost ground, with South Korea’s KOSPI falling 0.20%.

In China, the Shanghai Composite eased 0.02%, while the smaller HANG SENG INDEX (INDEXHANGSENG:HSI) in Hong Kong retreated nearly 0.5%. Chinese stocks eased despite the approval of the potentially critical trading-link and lifting of some investment barriers.

What happened in Australia?

Shares in Australia closed higher Wednesday, with the S&P/ASX 200 advancing 0.11%. Rising stocks in Australia’s Consumer Discretionary, Resources and Energy sectors led the gains.

A weaker Aussie also appeared to have played a role in rising Australian shares as it boosted foreign interest.

What about Europe

European stocks opened lower Wednesday, with the Euro Stoxx 50 seen sliding more than 1% in the morning trade. Germany’s DAX 30 retreating 0.89% and France’s CAC 40 easing 0.70% around the same time.