Chinese stocks jump as investors watch oil price slump; yen hovers near 6-year low

Key Points

• Chinese stocks jumped as Hong Kong-listed casino and tech stocks rose. Property shares however went against the wider trend
• The yen was in focus for investors, trading at 123.73 per dollar as it continued to weaken — hovering near a six-year low.
• Oil prices slumped overnight on demand concerns arising from a new lockdown in Shanghai, diving more than 8%.
• Bitcoin broke past the key level of $45,000 overnight and erased its losses for 2022.

SINGAPORE — Stocks across Asia-Pacific rose, following a tumble in oil prices overnight. Bitcoin meanwhile surged past a key level, and the yen continued to weaken.

Hong Kong’s Hang Seng index jumped 0.77% in early trade, as casino and tech stocks rose. Property shares however went against the wider trend, as Sunac plummeted nearly 14% and Shimao lost 4.6%. China’s CSI real estate index was down 2%.

Sunac late Monday said it would halt trading from April 1, days after it said it would delay reporting its 2021 financial results and joining a growing list of Chinese developers who are not able to release earnings on time.

Mainland China’s Shanghai composite gained 0.31% while the Shenzhen component was up 0.51%.

Japan’s Nikkei 225 was 0.8% higher, while the Topix rose 0.69%. Tech stocks were up, with Sony rising 1.6% and SoftBank Group up 1.89%.

The yen was in focus for investors, trading at 123.73 per dollar as it continued to weaken — hovering near a six-year low.

“The Japanese yen remains the main story in FX land with USD/JPY extending its vertical rise over the past 24 hours,” wrote Rodrigo Catril, senior foreign exchange strategist at National Australia Bank in a Tuesday note.

One big factor of recent yen weakness had been the Bank of Japan’s yield curve control (YCC) policy which has confined the 10-year Japanese government bond (JGBs) rate to within a 0.25% range, even as core global bond yields have risen, Catril explained. That policy entailed keeping its 10-year government bond yield around or near zero. 

Markets were wondering if commitment to that policy was “wavering” amid concerns over rising inflation, Catril said. But on Monday, the central bank “sent a strong signal that YCC is here to stay for a while yet,” as it offered to buy unlimited amounts of 10-year JGBs at 0.25% for the first four days of this week.

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That pushed the yen to a seven-year low of 125 against the dollar on Monday. but later regained some ground to a six-year low of 124, according to Reuters.

“The affirmation of its YCC commitment, triggered an aggressive yen selling with USD/JPY rising to a high of ¥125.09, before easing down to ¥123.87 currently,” Catril said Tuesday morning.

“Expect the Bank of Japan to keep buying unlimited bond to cap the 10Y JGB yield at the 0.25% limit under the yield curve control framework,” DBS foreign exchange strategists Eugene Leow and Philip Wee said in a note.

In other Asia-Pacific markets, Australia’s S&P/ASX 200 jumped 0.73%, as bank stocks rose. However, miners and oil stocks declined, bucking the trend. South Korea’s Kospi was up 0.34%.

Australia reported retail sales for February, which beat expectations, jumping 1.8% from January to hit $33.1 billion Australian dollars ($24.8 billion). That beat forecasts of a 1% gain, according to a Reuters poll.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.48%.

Oil prices slump

Oil prices slumped overnight on demand concerns arising from a new lockdown in Shanghai, diving more than 8%.

″Shanghai accounts for 4% of China’s total oil consumption. Markets are fearing the outbreak could ultimately put under threat the 15.5 [million barrels per day] of oil the country consumes,” said ANZ Research analysts Brian Martin and Daniel Hynes.

Prices continued sliding in the morning of Asia trade, with U.S. crude futures slipping 1.41% to $104.5, and Brent crude futures down 1.24% to $111.08 per barrel. 

Wall Street on Monday gained in a tech-heavy market rally. The Dow Jones Industrial Average rose 94.65 points or 0.27%. The S&P 500 climbed 0.7%, while the Nasdaq Composite gained 1.31%.

Currencies

Bitcoin broke past the key level of $45,000 overnight and erased its losses for 2022, jumping as high as 6.7% to $47,914.35. It was last nearly 6% higher at $47,514.

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE
.N225	Nikkei 225 Index	*NIKKEI	28110.73	166.84	0.6
.HSI	Hang Seng Index	*HSI	21742.05	57.08	0.26
.AXJO	S&P/ASX 200	*ASX 200	7470.5	58.1	0.78
.SSEC	Shanghai	*SHANGHAI	3203.56	-10.94	-0.34
.KS11	KOSPI Index	*KOSPI	2739.37	9.81	0.36
.FTFCNBCA	CNBC 100 ASIA IDX	*CNBC 100	9227.82	55.8	0.61

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.159 — jumping from levels around 98.8 from previous sessions.

The Australian dollar was at $0.7490, a touch softer than levels around $0.75 before.

Sorce : CNBC