A currency trader works near the screen showing the Korea Composite Stock Price Index (KOSPI), right, at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, on July 20, 2015. Asian stocks mainly rose on Monday, Aug. 10, led by a surge in China. AP
HONG KONG–Asian shares mainly rose on Monday, led by a surge in China as hopes for more market intervention and state-backed mergers overshadowed fresh weak economic data from the world’s number two economy.
Meanwhile, the dollar gained against the yen after upbeat jobs data on Friday added to expectations the US central bank will raise interest rates as early as September.
Tokyo equities scraped back earlier losses to close up 0.41 percent and Sydney added 0.63 percent.
Shanghai led the gains, with shares closing up 4.92 percent on speculation the government will accelerate mergers between state-owned enterprises and release new funds to support the market.
“Though the economy as a whole is not performing quite well, it may lead to more loosening of monetary policy,” Zhang Qi, an analyst from Haitong Securities, told AFP.
“There might also be more state investment and reform of state-owned enterprises.”
Hong Kong clawed back early losses to end the day down 0.13 percent, while Seoul bucked the regional trend to close 0.35 percent lower.
Beijing has unleashed unprecedented measures to support equities–including a crackdown on short-selling, suspension of new offerings and a ban on major shareholders selling their stakes–since the market collapsed in mid-July.
Stocks surged for a second day after China’s securities regulator late on Friday said it had called on brokers and fund managers to help stabilise the market.
Reports that Beijing plans to merge two major shipping companies, China Shipping Group and Cosco Group, also stirred speculation it could herald a shake-up of the country’s inefficient state-owned enterprises.
The news drove state-backed companies higher–China Shipbuilding Industry Co., China Coal Energy Co., and China United Network Communications Ltd. all surged by the 10 percent daily limit.
Railway firms also gained. In Shanghai, China Railway Construction soared 9.49 percent to 18.34 yuan while China Railway Erju also climbed 8.31 percent to 17.07 yuan.
“State-owned enterprise mergers are an investment theme that’s quite certain and there are signs that the move will speed up,” Li Jingyuan, a general manager at Shanghai Zhaoyi Asset Management, told Bloomberg News.
Disappointing trade data
The gains came after trade data showing China’s exports plunged 8.3 percent from a year earlier, while imports dropped 8.1 percent, added to concerns over the health of Asia’s largest economy.
Beijing on Sunday said inflation rose 1.6 percent in July, well below the government’s annual target of three percent, while producer prices declined to their lowest level since late 2009.
The news will likely hit commodities and particularly base metals, analysts said, which plumbed to multi-year lows last week over signs demand is waning in massive importer China.
Higher rates tend to push up the US currency, which in turn makes dollar-priced commodities less attractive to international investors and so dents prices.
Gold fetched $1,094.78, slightly higher than $1,089.64 late Friday and above last week’s nadir of $1,072.34–its lowest level since February 2010.
But oil prices continued their decline, coming under pressure after reports of a rise in US rigs added to concerns of a supply glut, both globally and particularly in the world’s top crude consumer.
US benchmark West Texas Intermediate (WTI) for delivery in September fell to $43.76 a barrel from $43.87 in New York Friday. Brent North Sea crude for September traded at $48.50 a barrel, down from $48.61.
In currency markets, the dollar pushed higher after news the US added 215,000 jobs in July and unemployment held steady at a seven-year fueled predictions the Federal Reserve could raise rates as early as September.
The greenback ticked up to 124.40 yen from 124.22 yen in New York on Friday. The euro edged higher to $1.0972 and 136.48 yen, from $1.0962 and 136.16 yen.
“Expectations around an upcoming move on rates from the Federal Reserve have picked up somewhat, with the implied probability now sitting at 54 percent,” said Chris Weston at IG Markets.
In individual stocks, US-listed Chinese Internet giant Alibaba is to pay 28.3 billion yuan ($4.6 billion) for a nearly 20 percent stake in consumer electronics retailer Suning, the two companies said in a statement Monday.
In Tokyo, shares in Japan Display jumped 13.6 percent to 426 yen after the smartphone screen-maker reported upbeat earnings when markets closed Friday.
In other markets:
— Mumbai fell 0.48 percent, or 134.67 points, to close at 28,101.72.
Bharat Heavy Electricals increased 2.01 percent to 271.15 rupees but Oil and Natural Gas Corporation slid 2.55 percent to 275.10 rupees.
— Bangkok dropped 0.61 percent, or 8.66 points, to 1,420.13
Airports of Thailand fell 2.41 percent to 284 baht, while Siam Cement slid 1.15 percent to 516 baht.
— Kuala Lumpur fell 1.68 percent, or 28.28 points, to close on 1,654.37.
Petronas Chemicals lost 4.30 percent to end at 6.01 ringgit, and Telekom Malaysia shed 2.88 percent to 6.41 ringgit.
— Jakarta ended down 0.49 percent, or 21.35 points, at 4,748.95.
Financial services company Kresna Graha Investama gained 60 percent to 935 rupiah while air transport provider Indonesia Transport & Infrastructure fell 11.11 percent to 56 rupiah.
— Manila closed flat, adding 1.83 points to 7,534.35
Universal Robina Corp. led gainers, rising 3.10 percent to 196.50 pesos, while top-traded Philippine Long Distance Telephone ended 1.96 percent down at 2,702.00 pesos.
— Taipei rose 0.29 percent, or 24.55 points, to 8,466.84.
Taiwan Semiconductor Manufacturing Co. shed 3.01 percent to Tw$129.0 while Fubon Financial Holding gained 2.11 percent to Tw$58.2.
— In Wellington, the NZX-50 was flat, edging down 3.64 points to 5,865.02.
Contact Energy rose 0.78 percent to NZ$5.19 while Auckland International Airport was down 3.05 percent at NZ$5.245
— In Singapore markets were closed for a public holiday.–Caroline Henshaw