Asia-Pacific Markets Mixed; China, Hong Kong Tech Shares Surge, Regional Energy Stocks Jump

The major Asia-Pacific stock indexes finished mixed with China and Hong Kong posting solid gains. Driving the price action in those two regions were developments out of Washington that centered on Chinese tech giants. In all of the areas, regional energy stocks took center stage with strong advances.

The gains in China and Hong Kong were driven by strength of shares of Chinese tech giants Tencent and Alibaba which rose after U.S. President Donald Trump signed an executive order banning transactions with eight Chinese software applications, including WeChat Pay and Ant Group’s Alipay. The order is only set to go into effect after Trump leaves office.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 27055.94, down 102.69 or -0.38%. Hong Kong’s Hang Seng Index finished 27692.30, up 42.44 or +0.15% and South Korea’s KOSPI Index closed 2968.21, down 22.36 or -0.75%.

China’s Shanghai Index settled at 3550.88, up 22.20 or +0.63% and Australia’s S&P/ASX 200 Index finished at 6607.10, down 74.80 or -1.12%.

In other news, regional energy stocks also advanced in Wednesday trade after Saudi Arabia agreed to voluntary production cuts in February and March. Also, a private survey showed services sector activity in China expanded at a slower pace in December.

Trump Bars US Transactions with Eight Chinese Apps Including Alipay

U.S. President Donald Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay mobile app, the White House said, escalating tensions with Beijing two weeks before President-elect Joe Biden takes office.

The move, first reported by Reuters, is aimed at curbing the threat to Americans posed by Chinese software applications, which have large user bases and access to sensitive data, a senior administration official told Reuters.

China’s Blue-Chip Index Ends at 13-year High Led by Gains in Banking, Healthcare Stocks

China’s blue-chip index closed on Wednesday at its highest level in nearly 13 years after rising for five consecutive sessions, as investors expect the government to sustain policy supports to counter COVID-19’s persisting impact on the economy.

In other news, a private survey showed services sector activity in China expanding at a slower pace in December, with the Caixin/Markit services Purchasing Managers’ Index coming in at 56.3. That compared against November’s reading of 57.8.

Hong Kong Shares End Higher on Energy, Tech Supports

Hong Kong shares extended gains on Wednesday after rising for six consecutive sessions, led by energy and tech shares. At the close of trade, the benchmark Hang Seng Index was trading at its highest level since last February.

For a look at all of today’s economic events, check out our economic calendar.