Asian Shares Advance As Bank Contagion Fears Ease

Asian stocks advanced on Wednesday as U.S. bank contagion fears eased and China’s economic data for January and February confirmed activity was recovering in the aftermath of COVID restrictions and outbreaks.

China’s Shanghai Composite index rose 0.55 percent to 3,263.31 after data from the National Bureau of Statistics showed China’s industrial production and retail sales expanded in the January to February period.

Industrial output grew 2.4 percent on a yearly basis in January to February period, faster than the 1.3 percent increase posted in December.

Retail sales advanced 3.5 percent from the last year, in contrast to the 1.8 percent decline in December.

Fixed asset investment increased 5.5 percent annually in the first two months of 2023, which was bigger than economists’ forecast of 4.4 percent.

Hong Kong’s Hang Seng index rallied 1.52 percent to 19,539.87, led by property developers after data showed property investment fell at a slower pace in January-February.

Japanese shares ended on a flat note as the BOJ January meeting minutes showed board members debated feasibility of tweaking the yield curve control.

The Nikkei average closed marginally higher at 27,229.48, snapping a three-day losing run. The broader Topix index closed 0.65 percent higher at 1,960.12, led by banks with Suruga Bank and Shimane Bank both climbing 5-6 percent.

Startup investor SoftBank Group dropped 1.4 percent and Uniqlo store operator Fast Retailing shed 1.7 percent.

Seoul stocks rebounded, with the Kospi average finishing 1.31 percent higher at 2,379.72, tracking regional gains. Samsung Electronics, SK Hynix, LG Chem, Hyundai Motor and LG Energy Solution rose 1-3 percent. Kia Corp surged 4.3 percent after unveiling the design of its new all-electric SUV.

Australian markets snapped a three-session losing streak amid signs that U.S. inflation is slowing, and the U.S. banking crisis would be contained.

The benchmark S&P/ASX 200 settled 0.86 percent higher at 7,068.90, marking its best single-day performance since January 12. The broader All Ordinaries index rose 0.86 percent to close at 7,263.10.

Tech stocks topped the gainers list, with Xero climbing 4 percent. 29 Metals slumped 14.8 percent after announcing that mining operations at its Capricorn Copper mine in Mount Isa Shine, Queensland, could be suspended for three to four months, following heavy rainfall in the region.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index edged up 0.19 percent to 11,617.27.

U.S. stocks rallied overnight, with banks leading the surge after regulators assured that there won’t be a relapse of the financial crisis from 15 years ago.

Data showed inflation eased slightly last month, helping offset recent concerns about the outlook for interest rates ahead of next week’s FOMC meeting.

The Dow gained 1.1 percent to snap a five-day losing streak, while the S&P 500 climbed 1.7 percent and the tech-heavy Nasdaq Composite jumped 2.1 percent.

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