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James Hyerczyk
Asia Pacific Shares

The major Asia-Pacific shares finished mixed but mostly higher on Thursday as investors regionally reacted positively to strong Chinese trade data, while ignoring news of the first COVID-19 death in China in nine months. Investors also shrugged off U.S. President Donald Trump’s record impeachment and instead focused on reports that his replacement, Joe Biden, will lay out a new U.S. $2 trillion stimulus program later.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 28698.26, up 241.67 or +0.85%. Hong Kong Hang Seng Index finished at 28496.86, up 261.26 or +0.93% and South Korea’s KOSPI Index closed at 3149.93, up 1.64 or +0.05%.

In China, the Shanghai Index settled at 3565.90, down 32.75 or -0.91% and Australia’s S&P/ASX 200 finished at 6715.30, up 28.70 or +0.43%.

China Releases Optimistic Trade Data

China’s exports rose 18.1% in December as compared with a year earlier, according to customs data released Thursday. That was higher than expectations for a 15% increase by analysts in a Reuters poll.

Meanwhile, China’s imports grew b6.5% year-on-year in December, as compared with expectations for a 5% rise in a Reuters poll.

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China Reports First COVID Death in More than Six Months

Mainland China on Thursday reported the first new COVID-19 death since May as authorities try to control a spike in cases just outside of Beijing. A woman in Hebei province died Wednesday afternoon, state media reported, noting her illness was a severe case and she had pre-existing health conditions.

The National Health Commission recorded Wednesday’s death in its daily report on the local coronavirus situation, the first addition to the overall toll since May 2000.

More positive vaccine data was released on Wednesday with the New England Journal of Medicine reporting that trial data showed Johnson & Johnson’s one –shot COVID is safe and appears to generate an immune response in both young and elderly volunteers.

Hong Kong Listed Alibaba and Tencent Shares Jump

The Hong Kong listed shares of Chinese tech giants Alibaba and Tencent and Baidu all rose sharply after sources told Reuters and the Wall Street Journal that plans to extend a U.S. investment ban to the stocks had been scrapped.

Alibaba and Tencent alone are worth over $1.3 trillion and are two of three biggest emerging market stocks in the world, making up more than 10% of the widely-followed MSCI emerging market equity index.

“I think the market is relieved,” said Chinese equity portfolio manager at William Blair Investment Management Vivian Lin Thurston.

“However, concerns over this risk and therefore volatility of these stocks may continue in the near future until perhaps the new (Biden) administration’s China strategy becomes clear.”

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