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Stocks & Shares

Asian shares rise as China rebounds

China stocks

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3%, after a 0.7% drop from the earlier session

Asian shares rose on Tuesday thanks to a bounce in battered Chinese markets, although investors were cautious after a decline on Wall Street amid diminishing expectations of a near-term Fed rate cut, which in turn underpinned the dollar.

Oil prices held largely stable as traders took stock of a visit to the Middle East by U.S. Secretary of State Antony Blinken to discuss a ceasefire offer in the region.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3%, after a 0.7% drop from the earlier session.

Chinese stocks, which had initially opened lower on Tuesday, later reversed course on recent signs of support from state-backed investors and as authorities have moved in to stem heavy losses in the market.

The blue-chip CSI300 Index was up more than 1.5%, while Shanghai Composite Index added 0.3%, after having plunged to a five-year low on Monday.

The CSRC said on Monday that it would tighten scrutiny of margin financing, malicious short selling and seek to ward off risks involving pledged shares.

I think China’s regulators made four statements yesterday in an attempt to prop up a market that does not want to be propped up, which itself is a sign of panic, said Matt Simpson, senior market analyst at City Index.

Hong Kong’s Hang Seng Index added 1.7%.

Elsewhere, Australia’s S&P/ASX 200 index dropped 0.76% ahead of a rate decision by the country’s central bank later in the day, while Japan’s Nikkei slipped 0.72%.

Data on Monday showed the U.S. services sector growth picked up in January as new orders rose and employment rebounded, adding to growing doubts about the slew of Fed rate cuts priced in for this year, which had already been dialled back in the wake of Friday’s blockbuster U.S. jobs report.

That kept the greenback propped close to more than a two-month high against the euro and the yen.

The euro last bought $1.0746, while the yen stood at 148.54 per dollar.

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