South Korean shares posted on Thursday their best day in almost two months, driven by chip heavyweights and foreign buying.
The major Asia-Pacific stock indexes were up across the board on Thursday as investors followed the lead set by the strong performance on Wall Street the previous session. Shares in South Korea posted the biggest gain.
The bullish tone was set by the moves on Wall Street as U.S. Federal Reserve Chair Jerome Powell continued to downplay the threat of inflation, saying it could take three years to reach the central bank’s target consistently.
In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 30168.27, up 496.57 or 1.67%. Hong Kong’s Hang Seng Index finished at 30074.17, up 355.93 or +1.20% and South Korea’s KOSPI Index closed at 3099.69, up 104.71 or +3.50%.
In China, the Shanghai Index settled at 3585.05, up 20.97 or +0.59%. Australia’s S&P/ASX 200 Index finished at 6834.00, up 56.20 or +0.83%.
In Wednesday’s testimony in front of the House Financial Services Committee, Powell said inflation could be volatile as the economy reopens and there’s increased demand. Still, the Fed chair does not expect inflation to run hot and said the central bank has tools to combat it if it should.
South Korean shares posted on Thursday their best day in almost two months, driven by chip heavyweights and foreign buying, after U.S. Federal Reserve Chair Jerome Powell’s reaffirmation to keep interest rates low boosted risk appetite globally.
Chip giants Samsung Electronics and SK Hynix rose 4.02% and 9.19%, respectively, while Naver and LG Chem added 2.41% and 3.49%.
In other news, the Bank of Korea said it was in no rush to remove monetary stimulus even with inflationary expectations on the rise, as the pandemic continues to cloud economic outlook.
Hong Kong shares bounced on Thursday after posting their worst session in over nine months a day earlier, as investors largely looked past Hong Kong’s move to raise stamp duty on stock trading.
The hike could create some short-term negative impact on stock trading, Yang Lingxiu, chief strategist at Citic Securities, said. Economic recovery and listings of new-economy companies and some U.S.-listed Chinese firms’ secondary listing, however, would continue to attract fund inflows into Hong Kong, he added.
Hong Kong brokerages could have to absorb the government’s planned increase in stock trading stamp duty or reduce their already wafer-thin commissions, according to brokers, amid concerns the higher levy will reverse a retail buying craze.
China shares rebounded on Thursday, as strong gains in the property sector helped the market recover from sharp losses made a day earlier.
Property shares were among the top gainers after some research notes by local brokerages said the valuation of the real estate sector was at a historically low level. A gauge that tracks the sector jumped 8.17%.
Separately, sentiment was slightly supported by Chinese President Xi Jinping celebrating “complete victory” in the effort to eradicate rural poverty at a ceremony in Beijing on Thursday to mark a signature initiative of his eight-year tenure.
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James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.