Asia-Pacific Shares

Asia-Pacific Shares Mostly Higher Despite Increasing Concerns Over US-China Relations

The major Asia-Pacific stock index futures finished mostly higher on Friday with Hong Kong shares the lone loser after taking a hit from late session selling. The other majors took their cues from Wall Street’s strong performance the previous session.

The catalysts behind the markets’ strength were lower Treasury yields which eased some of the recent pain for technology sector traders, upbeat initial claims data that provided some support for the labor market recovery and President Joe Biden’s signing of the $1.9 trillion coronavirus relief package that is expected to give the economy an extra boost.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 29717.93, up 506.19 or +1.73%. Hong Kong’s Seng Index finished at 28739.72, down 645.89 or -2.20% and South Korea’s KOSPI Index closed at 3054.39, up 40.69 or +1.35%.

China’s Shanghai Index settled at 3453.08, up 16.25 or +0.47% and Australia’s S&P/ASX 200 Index finished at 6766.80, up 52.90 or +0.79%.

China Stocks Post Weekly Drop on Policy Tightening Worries

China shares posted a weekly loss on Friday as a conservative 2021 economic growth target sparked fears Beijing could tighten policy to rein in lofty valuations, though infrastructure firms helped benchmark stocks indexes eke out gains for the day.

Last Friday, China set a modest annual economic growth target, at above 6%, which was significantly below the consensus of analysts, who had expected growth could beat 8% this year.

Chinese Premier Li Keqiang defended the government’s target for more than 6% economic growth this year, saying it was “not low”, and policies would not be dramatically loosened to chase higher growth.

A lower economic growth target gives China room to rein in frothiness in the market even as inflation fears grow, said analysts.

Once high-flying sectors with lofty valuations had been the hardest hit in recent weeks.

Hong Kong Stocks End Week Lower on Sino-US Tensions

Hong Kong stocks fell on Friday to post weekly losses, weighed down by weakness in tech firms on worries about the latest Sino-U.S. tensions.

The United States on Thursday condemned Chinese moves to change Hong Kong’s electoral system and forecast “difficult” talks with Beijing’s top diplomats next week.

China again warned the United States to stop interfering in its affairs, including Hong Kong, foreign ministry spokesman said on Friday.

Shares of Huawei suppliers retreated as the U.S. administration added new limits on those companies.

The Hang Seng Tech Index, which is sensitive to the developments of Sino-U.S. relations, closed down 2.1%, having lost 23% from an all-time high hit just three weeks ago, Reuters reported.

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.