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Singapore - Most Asian stocks rose as Chinese equities posted their longest winning streak in a month amid optimism over President Xi Jinping’s state visit to the US.
Haitong Securities climbed 1% in Hong Kong, pacing gains among Chinese brokerages, after British officials said they will study the feasibility of setting up a London- Shanghai stock trading link.
Li & Fung, the world’s largest supplier of clothes and toys to retailers, jumped 10% after Bank of America raised its rating on the stock to buy. Sembcorp Industries climbed 2.5% in Singapore after the utility company agreed to sell its stake in a waste management joint venture in Australia to its partner.
The MSCI Asia Pacific Excluding Japan Index fell 0.1% to 497.08 as of 10:22, with about four shares rising for each that fell.
Japanese markets are closed for a holiday, while China’s benchmark Shanghai Composite Index gained for a third day.
US stocks also rose after Fed Bank of Atlanta chief Dennis Lockhart joined other Fed presidents in saying he remains confident policy will be tightened this year as concern over turmoil in global markets touted by Chair Janet Yellen last week should prove temporary.
“Some investors are heartened by optimism over Xi’s visit to the US,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. “The market is in a cautious mode, keeping a close watch on the progress of talks between the two countries.”
Xi visit
China and the US are expected to reach agreements on trade, energy, climate, finance, aviation, defense and infrastructure construction during Xi’s September 22 to September 25 visit, Foreign Minister Wang Yi said last week.
Deals announced before the trip include the first Chinese-made bullet-train project in the US.
China’s Shanghai Composite Index climbed 0.9%. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong lost 0.7%, while the city’s benchmark Hang Seng Index rose 0.2%.
Australia’s S&P/ASX 200 Index rose 0.7%, so did Taiwan’s Taiex index. South Korea’s Kospi index climbed 0.9%. New Zealand’s S&P/NZX 50 Index added 0.2%. Singapore’s Straits Times Index slid 0.1%.
Market confusion
E-mini futures on the Standard & Poor’s 500 Index declined 1.2% on Tuesday. The US equity benchmark index rose 0.5% on Monday. Fed chair Janet Yellen slated to speak later this week, potentially providing more clarity as to whether to expect a rate increase this year.
“The Fed’s policy action or inaction is creating quite a bit of confusion in the market,” Bernard Aw, a strategist at IG Asia Pte in Singapore, said by phone. “The Fed is trying to soothe the market but it’s having the opposite effect. There’s a lack of conviction in the markets.”
Odds of a hike at the next meeting in October are at 20%, according to fed funds futures, while the probability of an increase at the last meeting of the year, on December 16, is 48.8%, down from 58.7% a week ago.
