Chinese stocks rise on hopes of infrastructure boost; tech stocks jump

SINGAPORE – Asia-Pacific stocks were higher in Thursday morning trade, as investors in the region watched for market reaction to the Bank of Japan’s latest monetary policy decision.

Mainland Chinese stocks edged higher, with the Shanghai Composite rising 0.75% while the Shenzhen Component gained 0.283%.

In Hong Kong, the Hang Seng index surged 1.59%.

When we see the economy weakening further then we get the government stepping in with new measures to stabilize growth but… it’s more reactive than proactive and I think that markets are waiting for something stronger, more proactive.

Dan Fineman

co-head of equity strategy for Asia-Pacific, Credit Suisse

Chinese President Xi Jinping on Tuesday called for an “all-out” effort to build infrastructure. His comments come as mainland China has since March been facing its worst outbreak of Covid-19 since the initial shock of the pandemic in early 2020.

“What we hear from government figures will matter a great deal more for markets than what the GDP numbers are. The GDP numbers are always going to be backwards looking whereas China’s economy and markets are very much policy-driven,” Dan Fineman, co- head of equity strategy for Asia-Pacific at Credit Suisse, told CNBC’s “Street Signs Asia” on Thursday.

“What we’re getting right now is, I would say, fairly reactive policy. When we see the economy weakening further then we get the government stepping in with new measures to stabilize growth but it’s more reactive than proactive and I think that markets are waiting for something stronger, more proactive, “he added.

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Shares of Chinese tech stocks in Hong Kong climbed in Thursday morning trade, with Alibaba jumping 4.49% and Tencent rising 1.02%. The Hang Seng Tech index traded 1.27% higher.

The internet tech stocks rose after news late Wednesday that as part of Beijing’s push to support employment, the government planned to support the so-called platform economy in order to create more jobs.

Japan holds steady on policy

The Nikkei 225 in Japan rose 0.61% while the Topix index climbed 1%.

Japan’s retail sales rose more than expected in March, according to government data released Thursday. Retail sales gained 0.9% in March as compared to a year earlier, above median market a forecast for a 0.4% rise, according to Reuters.

The Bank of Japan on Thursday announced its decision to hold steady on its monetary policy, a largely expected move. The Japanese central bank also said in its monetary policy statement that it “expects short- and long-term policy interest rates to remain at their present or lower levels.”

Following the announcement, the Japanese yen weakened to 129.41 per dollar, as compared to an earlier high of 128.32 against the greenback. The Japanese currency has for weeks weakened against the dollar, with expectations the Bank of Japan is set to be relatively slower in normalizing monetary policy as compared to peers such as the US Federal Reserve.

Elsewhere, South Korea’s Kospi advanced 0.56% while the S & P / ASX 200 in Australia gained 1.05%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.83% higher.

Overnight stateside, the S&P 500 gained 0.21% to 4,183.96. The Dow Jones Industrial Average climbed 61.75 points, or 0.19%, to 33,301.93. The tech-heavy Nasdaq Composite was little changed at 12,488.93.

Currencies and oil

The US dollar index, which tracks the greenback against a basket of its peers, was at 103.24 – continuing to hold above the 102 levels it crossed earlier this week.

The Australian dollar changed hands at $ 0.7114, off levels above $ 0.72 seen earlier in the week.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 1.52% to $ 103.72 per barrel. US crude futures shed 1.53% to $ 100.46 a barrel.

– CNBC’s Evelyn Cheng contributed to this report.

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