Asian stocks were broadly up on Wednesday after a strong lead from Wall Street, but fears lingered over China’s debt-hobbled property sector.
The main indexes in New York had rallied as worries about the impact of the Omicron coronavirus variant faded.
In Hong Kong, Chinese real estate company Kaisa suspended trading just before the opening bell, “pending the release by the company of an announcement containing inside information”, according to a filing with the exchange.
Kaisa, China’s 27th-largest property firm but one of its most indebted, became the latest company to spook investors when it announced last Friday that it had failed in a bid for a debt swap that would buy it crucial time.
China’s real estate sector – a key growth driver in the world’s second-largest economy – has cooled in recent months after Beijing tightened home-buying rules and launched a regulatory assault on speculation. The moves have created headaches for several major developers, notably China Evergrande, the country’s second-largest by volume, which is billions of dollars in debt.
On Tuesday, Evergrande missed a deadline to repay some of its overseas creditors, raising the prospect of a default as it prepares for a government-backed mega-restructure.
Receding Omicron fears
At the close in Hong Kong on Wednesday, the Hang Seng Index was up 0.06 per cent at 23,996.87. In Tokyo, the Nikkei 225 closed 1.42 per cent higher at 28,860.62. Shanghai and Shenzhen both finished up by more than one per cent.
“The Nikkei index was up following gains of US shares. A wide variety of high tech shares were bought as fears over the Omicron variant receded,” Okasan Online Securities said in a note.
Sydney was up more than one per cent, with Wellington gaining two per cent. Seoul, Jakarta and Taipei were marginally higher, while Singapore was slightly down.
Europe’s top stock markets steadied at the open on Wednesday after surging the previous session. London’s benchmark FTSE 100 index gained 0.2 per cent, while Frankfurt’s DAX index and the Paris CAC also rose.
Wall Street stocks were up for a second straight session on Tuesday, with the tech-rich Nasdaq enjoying a three per cent jump.
Carol Kong, a strategist at the Commonwealth Bank of Australia, said the initial evidence about Omicron “appears to have calmed financial markets, for now, as evidenced by the recovery in risk assets. But we caution against drawing conclusions from these early reports.”
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