Asian stocks: Shanghai soars 3.1%
Stocks in Shanghai rose to their highest level since July 2011 on Tuesday, while the Australian market rebounded on a recovery in oil prices.
Of 19 listed brokerages, 10 hit their 10% daily upside limit. Analysts expect them to profit as trading volumes and the balance of lending to investors for margin trading pick up with a new link to Hong Kong drawing capital from global investors. Leverage ratios are also expected to rise as Chinese regulators ease controls on financing channels for brokerages.
Bank stocks also rallied as investors bet on further monetary easing. Official data Monday showed a worse-than-expected slowdown in China’s manufacturing activity. China Minsheng Banking Corp. 600016, +10.01% 1988, +5.58% CMAKY, +3.43% and Bank of Communications 601328, +9.96% 3328, +4.61% rose by the 10% daily upper limit to 10.01 yuan and 9.96 yuan, respectively. Bank of China 601988, +5.33% BACHY, -2.06% added 5.3% to 3.56 yuan.
“Institutional investors are in a hurry to increase their positions in blue-chip stocks, such as financial companies,” said Huang Cendong, an analyst at Sinolink Securities, adding a moderate consolidation will likely follow.
In Australia, the S&P/ASX 200 XJO, +1.41% rose 1.4% to 5,281.3 after an overnight rebound in oil prices. Benchmark U.S. oil prices on the New York Mercantile Exchange CLF5, -1.54% surged 4.3% to $69 a barrel, the largest percentage gain in more than two years in a rally that snapped four sessions of losses.
BHP Billiton Ltd. BHP, +3.86% BLT, +2.39% BHP, -0.54% which fell to a 5 1/2 -year low Monday, helped drive the market with a gain of 3.9%. Rio Tinto RIO, +2.24% RIO, +1.27% RIO, -0.09% added 2.2%, OZ Minerals OZL, +5.35% rose 5.4% and Newcrest Mining NCM, +7.73% NCMGY, +1.43% increased 7.7%. The same energy sector stocks knocked 3.6% off Australia’s benchmark in the last two trading sessions, when investors worried that a sustained drop in oil prices would weigh on the bottom line of the country’s oil producers.
Late in Asia, crude oil was roughly flat at $68.99 a barrel.
The Nikkei Stock Average NIK, +0.42% gained 0.4% to 17,663.22, its third straight increase, even though Moody’s Investors Service downgraded Japan’s credit rating by one-notch late Monday. The market got a lift from the U.S. dollar USDJPY, +0.47% , which rose 0.5% to 118.86 against the Japanese yen.
- Market Watch
- Published on:
- December 2, 2014
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