Asia-Pacific Shares Finish Mixed as Early Gains Fade on China Tightening Concerns

The major Asia-Pacific stock indexes finished mixed on Wednesday after shares in Australia, Japan and South Korea gave up most of their earlier gains. Helping to underpin the market was stronger risk appetite as global bond yields dipped and confidence grew that a massive U.S. stimulus package will be approved on Wednesday.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 29036.56, up 8.62 or +0.03%. Hong Kong’s Hang Seng Index finished at 28907.52, up 134.29 or +0.47% and South Korea’s KOSPI Index closed at 2958.12, down 18.00 or -0.60%.

China’s Shanghai index settled at 3357.74, down 1.55 or -0.05% and Australia’s S&P/ASX 200 Index finished at 6714.10, down 57.10 or -0.84%.

The session in the Asia-Pacific region was impressive early in the session as investors followed Wall Street’s lead where bond yields declined and tech stocks soared.

“Global equities pushed higher as risk appetite returned, according to a Wednesday morning note from analysts at ANZ Research. “Investor confidence was buoyed by expectations that (U.S. President Joe) Biden’s $1.9 trillion fiscal stimulus package will soon be approved.

Democrats in the U.S. House of Representatives are aiming to pass the $1.9 trillion coronavirus relief bill on Wednesday so that Biden can sign it by the weekend.

Hong Kong Shares Boosted by Strong Tech Stock Performance

Hong Kong shares closed higher on Wednesday, led by tech stocks as the NASDAQ Index surged on Wall Street on a retreat in U.S. bond yields. Gains may have been capped, however, by fears of policy tightening in China.

The Hang Seng China Enterprises index rose 0.79% to 11,059.67. The IT sub-index climbed 2.64%, while the energy sector dipped 1.6%.

South Korean Shares Decline for Fifth Session

South Korean shares closed lower for a fifth straight session on Wednesday, as uncertainties around volatile Chinese markets spooked investors even after the tech-heavy NASDAQ Index rebounded overnight.

There are doubts about whether a rout in China will stabilize, especially as Chinese inflation and producer prices exceeded expectations, said Lee Kyoung-min, an analyst at Daishin Securities.

Among the heavyweight companies, technology giant Samsung Electronics fell 0.61 percent and peer SK Hynix fell 2.56 percent, while LG Chem rose 3.48 percent and Naver rose 2.90 percent.

China’s Blue-Chip Index Ends Higher, Policy Tightening Worries Cap Gains

China’s benchmark index closed lower, but the country’s blue chip shares closed higher on Wednesday, a day after it hit a near 3-month low, although gains were capped by lingering concerns of policy tightening as the economy recovers.

In economic news, China’s factory gate prices rose at the fastest pace since November 2018 in February as manufacturers raced to fill export orders, raising expectations for robust growth in the world’s second-largest economy in 2021.

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