Asia-Pacific Shares Close Higher after Reversing Earlier Losses; Chinese Investor Silver Buying Escalates

The major Asia-Pacific stock indexes closed higher across the board on Monday after a rocky start. Asian shares traded lower early in the session after U.S. futures opened weak, but they turned higher as their U.S. counter-parts recouped their losses as newly empowered retail investors turned their attention to silver, promising a respite to some hard-hit hedge funds.

Cash Market Performance

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 28091.05, up 427.66 or +1.55%. Hong Kong’s Hang Seng Index finished at 28892.86, up 609.15 or +2.15% and South Korea’s KOSPI Index closed at 34056.53, up 80.32 or +2.70%.

In China, the benchmark Shanghai Index settled at 3505.28, up 22.21 or +0.64% and Australia’s S&P/ASX 200 Index finished at 6663.00, up 55.60 or +0.84%.

Several Catalysts Behind Price Recovery

Chinese blue chips gained as the country’s central bank injected more cash into money markets. This, despite data from two surveys showing factory activity slowed in January as restrictions took a toll in some regions.

In South Korea, the KOSPI jumped over 3% during the session as shares of biopharmaceutical firm Celltrion soared 14.51%.

The benchmark index in Australia edged higher, led by a surge in shares of several Australia-listed miners as traders reacted to a huge gain in spot silver prices.

China Manufacturing Growth Slows

The unofficial Caixin/Markit manufacturing purchasing managers’ index (PMI) came in at 51.5 for January, missing expectations for 52.7 according to a poll by Reuters. It was, however, still above the 50-point mark that separates expansion from contraction.

The data from Caixin came after Beijing released its official manufacturing PMI data over the weekend, with the measure coming in at 51.3 for January. That was also below expectations, with analysts polled by Reuters anticipating 51.6 for the month.

Hong Kong Shares Rise as Mainland Buying Lifts Tech Names

Hong Kong shares ended higher on Monday, lifted by high-tech and consumer firms, as mainland investors continued to purchase shares through the Stock Connect program.

Mainland investors purchased a net HK$16.7 billion ($2.15 billion) worth of Hong Kong, according to Refinitiv data.

Buying into ‘Poor Man’s Gold’, Chinese Investors Jump on Silver

Chinese investors rushed into silver investments on Monday, pushing up Shanghai silver prices while boosting performances of related stocks and funds, matching calls by global retail investors to boost prices of the precious metal.

Retail traders on Reddit and other social media who caused a rally in share prices of U.S. video game retailer GameStop Corp have now turned their attention to silver, leading Chinese investors to also jump on the bandwagon.

China’s domestic silver prices rose to their highest since September. Prices on the Shanghai Futures Exchange closed up 9.27% at 5,939 Yuan per Kilogram.

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