Asian Stocks

Asian Shares Finish Mixed as US Sanctions Derail China’s Rally, Japan’s Nikkei Hits 5-Week High

The major Asia-Pacific stock indexes finished mixed on Wednesday, bucking the trend on Wall Street amid rising concerns over U.S.-China tensions. Underpinning some and preventing an even steeper sell-off in others was a positive reaction to the latest developments surrounding a potential vaccine for the coronavirus.

On Wednesday, Japan’s Nikkei 225 Index settled at 22945.50, up 358.49 or +1.59%. Hong Kong’s Hang Seng index is trading 25436.99, down 40.90 or -0.16% and South Korea’s KOSPI Index closed at 2201.88, up 18.27 or +0.84%.

In China, the Shanghai Index settled at 3361.30, down 53.31 or -1.56% and Australia’s S&P/ASX 200 Index finished at 6052.90, up 111.80 or +1.88%.

Trump Signs Law Slapping Sanctions on China for Interference in Hong Kong

Shares in China and Hong Kong retreated in response to President Donald Trump’s signing of legislation designed to impose sanctions on China in response to its interference with Hong Kong’s autonomy.

Trump also said that he signed an executive order ending the preferential treatment that Hong Kong has long enjoyed.

The law, dubbed the Hong Kong Autonomy Act, would slap mandatory sanctions on Chinese officials and companies that helped back Beijing’s imposition of a security law that clamps down on dissent in Hong Kong. The sanctions bill passed both houses of Congress earlier this month.

“Hong Kong will now be treated the same as mainland China,” Trump said during a lengthy speech in the White House Rose Garden that quickly drifted away from that legislation to touch on a variety of campaign issues.

“No special privileges, no special economic treatment and no export of sensitive technologies. In addition to that, as you know, we are placing massive tariffs and have placed very large tariffs on China.”

Moderna Says Its Vaccine Produces Antibodies to Coronavirus

Investors are shrugging off reports of a surge in COVID-19 cases in the United States and other countries amid positive developments toward a vaccine that could eventually end the pandemic that has driven demand destruction throughout the world.

Moderna said its coronavirus vaccine produced antibodies in all patients in an early trial, raising hope for a faster economic recovery.

Biotech Moderna’s potential vaccine to prevent COVID-19 produced a “robust” immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial, according to newly released data published Tuesday evening in the peer-reviewed New England Journal of Medicine.

Shares of Moderna surged more than 16% in after-hours trading on Tuesday.

Australia Shares End Higher Tracking Wall Street Gains, Vaccine Optimism

Australian shares closed higher on Wednesday, mirroring overnight gains on Wall Street, with material stocks providing a major lift to the domestic benchmark. Its benchmark index posted its best day since June 30, despite tightened restrictions on movement to contain a fresh outbreak of COVID-19 that has pushed the national tally over 10,000.

Basic material stocks chased overnight gains in their U.S. counterparts, which were also a major boost to the U.S. indices in the last session.

Japan Shares Hit 5-Week High on Vaccine, Economic Growth Hopes

Japanese stocks rose on Wednesday to a five-week high as encouraging results from a coronavirus vaccine study and optimism about swift economic growth supported expectations that corporate earnings would pick up in the second half of the year.

The benchmark Nikkei Index hit its highest level since June 10, with industrial and consumer directional shares leading the advance.

In other news, recent data from many economies has shown signs that corporate activity and consumer spending are recovering from coronavirus-induced sharp declines.

Meanwhile, the Bank of Japan kept monetary policy steady on Wednesday and maintained its view that the economy would gradually emerge from the pandemic.

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

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.