Asian Shares Mostly Higher After China Sets Favorable Yuan Rate; Aussie Retail Sales Set Record

The major Asia-Pacific stock indexes finished mixed but mostly higher on Wednesday as China and South Korea traders returned from holiday. Markets in Japan and Thailand remained closed on Wednesday for their extended holidays.

Traders said the gains were in response to China’s Yuan fixing offering which was seen as a modest olive branch to Washington amid a resurgence in trade tensions.

On Wednesday, Hong Kong’s Hang Seng Index settled at 24137.48, up 268.82 or +1.13% and South Korea’s KOSPI Index finished at 1928.76, up 33.39 or +1.76%.

China’s Shanghai Index settled at 2878.14, up 18.06 or +0.63% and Australia’s S&P/ASX 200 Index closed at 5384.60, down 22.50 or -0.42%.

China’s Central Bank Appeases Washington

China’s central bank set the yuan at a broadly neutral midpoint, analysts said, helping take the focus off the exchange rate, a typically contentious point in Sino-U.S. ties. That helped mainland stocks claw back initial losses on their first day of trade since breaking for a holiday last week.

U.S. President Donald Trump has repeatedly taken aim at China as the source of the pandemic and warned that it would be held to account.

On Tuesday, he urged China to be transparent about the origins of the novel coronavirus that has killed more than a quarter of a million people worldwide since it started in the Chinese city of Wuhan late last year.

China Shares End Higher as Investors Await Fresh Stimulus

China shares settled higher on Wednesday as trading resumed after a week-long holiday, with investors awaiting follow-up supportive policies ahead of the annual parliament meeting to counter the economic fallout from the coronavirus outbreak.

Shares in major infrastructure firms rallied as Beijing unveiled plans to launch property investment trusts to spur infrastructure investment. China announced plans last Thursday to create a public market for real estate investment trusts (REITS), aiming to channel personal savings and private capital into infrastructure projects without overstretching already debt-laden local governments.

ASX Falls Despite Record for Australian Retail Sales

The Australian share market closed lower on Wednesday despite some retail stocks rallying after a record surge in sales and positive performances from overseas markets.

The major banks led the losses on the local market, while consumer stocks were mixed.

The Australian Bureau of Statistics (ABS) confirmed a record surge in retail turnover, beating the spike of sales ahead of the introduction of the GST in June 2000.

Sales rose 8.5 percent in March, surpassing the preliminary estimate of an 8.2% rise, as coronavirus concerns drove panic buying of pantry staples, canned foods and toilet paper.

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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.