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China Shares Finish Higher; Led by Chip Makers, Energy Shares

By:
James Hyerczyk
Updated: Oct 12, 2022, 15:11 GMT+00:00

China stocks rebounded sharply on Wednesday after data showed the country’s loan growth beat expectations.

Shanghai Stock Exchange

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The major Asia-Pacific stock markets finished mixed on Wednesday. Early in the session, Asian stocks were bogged down at two-year lows as China’s continuing COVID crisis and a surging U.S. Dollar weighed on investors. Later in the session, shares bounced off their lows as stocks in China recovered enough to close higher for the day.

In Japan, the benchmark Nikkei 225 Index settled at 26396.83, down 4.42 or -0.02%. Hong Kong’s Hang Seng Index closed at 16701.03, down 131.33 or -0.78% and South Korea’s KOSPI finished at 2202.47, up 10.4 or +0.47%.

In China, the Shanghai Index settled at 3025.51, up 45.71 or 1.53% and in Australia, the ASX 200 closed at 6647.50, up 2.5 or +0.04%.

Japanese Shares Dip, Tech Stocks Tumble

Japanese stocks hemmed and hawed in a volatile session on Wednesday, with many of the major players moving to the sidelines ahead of this week’s key U.S. Consumer Price Inflation (CPI) report that will be closely analyzed for clues to inflation and the rate hikes that could come to tame it.

According to Reuters, the biggest loser on the Nikkei was semiconductor equipment maker Tokyo Electron Ltd, which fell 4.69% amid ongoing struggles in the chips industry.

Demand was strong for system-on-chip designer Socionext Inc, however, which started trading on Wednesday after what is said to be the biggest IPO in Japan so far this year.

Today’s price action suggests there may be more downside in growth stocks, especially in the semi-conductor-related stocks. Besides fears of a global recession and higher rate hikes from the Fed, Apple’s decision to suspend iPhone production several weeks ago is also being blamed for the current weakness in the sector.

Additionally, the price action also indicates investors are likely to continue selling off high-tech stocks, while buying stocks related to domestic demand.

South Korean Shares Rise on Dovish Central Bank Outlook

South Korean stocks posted a small gain on Wednesday after the country’s central bank raised interest rates and flagged more to come, but also offered clues that policymakers may be considering slowing the pace of tightening.

The Bank of Korea (BOK) raised its benchmark policy rate by 50 basis points to 3.00%, as expected, bringing total rate hikes since August last year to 250 basis points.

China Stocks Rebound on Strong Credit Expansion, Hong Kong Stumbles

China stocks rebounded sharply on Wednesday after data showed the country’s loan growth beat expectations, while Hong Kong’s stock index hovered around 11-year lows amid concerns of China’s zero-COVID policy and overseas inflation and recession woes.

New bank lending in China nearly doubled in September from the previous month and far exceeded expectations after the central bank acted to spur an economy weakened by a property crisis and a resurgence of COVID-19 cases.

Meanwhile, China will persist with its COVID policies to avoid losing control over local coronavirus outbreaks, the official newspaper of the ruling Communist Party warned in commentary for the third straight day.

“Lying flat is not to be advised, and to win (the COVID battle) while lying flat is not possible,” People’s Daily wrote.

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

About the Author

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.

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