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Chinese stocks continue to surge, as Asian markets await word on Australian interest rates

MarketWatch logo MarketWatch 7/7/2020 Marketwatch
a sign on the side of the street: A pedestrian walks past the Reserve Bank of Australia in Sydney. © AFP/Getty Images A pedestrian walks past the Reserve Bank of Australia in Sydney.

Asian markets were mixed in early trading Tuesday, as investors awaited an interest-rate announcement by Australia’s central bank.

Japan’s Nikkei 225 (JP:NIK)  fell 0.6% and Hong Kong’s Hang Seng Index (HK:HSI)  was about flat. A day after surging more than 5%, the Shanghai Composite (CN:SHCOMP)  rose 1.2%, while the smaller-cap Shenzhen Composite (CN:399106)  gained 2.4%. South Korea’s Kospi (KR:180721)  declined 0.2%. Benchmark indexes in Taiwan (TW:Y9999)  , Singapore (SG:STI) and Indonesia (ID:JAKIDX)  bounced between slight gains and losses. Australia’s S&P/ASX 200 (AU:XJO)  rose 0.6%.

On Monday, stocks soared in mainland China as state media announced the arrival of a bull market and urged investors to buy.

“It remains to be seen whether we see another repeat of the euphoria of the 2015 Chinese stock market rally, but it certainly seems like retail is happy to buy into it,” Stephen Innes, chief global markets strategist at AxiCorp, wrote in a note. “China’s army of retail investors seem to be perfectly able to look through the worrying Western media headlines of another global coronavirus record; instead, they are listening to the enthusiastic chorus from the nation’s influential state media, which are universally singing bullish from the same song page.”

Shares of Samsung Electronics (KR:005930)  fell Tuesday after the tech giant projected a 23% gain in second-quarter profit, fueled largely by increased demand for memory chips.

The Reserve Bank of Australia was expected to make its decision on interest rates by mid-day. The central bank is expected to stay pat on rates, as business sentiment has improved amid Australia’s first recession in decades.

On Monday, stocks gained on Wall Street despite an increasingly worrying rise in coronavirus cases in the U.S. The Dow Jones Industrial Average (DJIA) gained 459.67 points, or 1.8%, to close at 26,287.03. The S&P 500 (SPX)  climbed 49.71 points, or 1.6%, closing at 3,179.72 and booking its fifth straight sessions of gains, its longest streak since Dec. 17, according to Dow Jones Market Data. The Nasdaq Composite Index (COMP)  surged 226.02 points, or 2.2%, to 10,433.65, finishing at another record high.

Video: Despite the rally in Chinese markets, geopolitical risks remain: OCBC (CNBC)


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