By HONG KONG (AP) — Shares in China slumped on Wednesday as details of economic stimulus plans from officials in Beijing failed to live up to investors’ expectations, while other markets in Asia rose.
Stocks in Hong Kong fluctuated between gains and losses, with the Hang Seng Index falling by 2.4% to 20,418.61. This decline followed a plunge of over 9% on Tuesday as traders sold off shares after recent rallies.
“A lack of new stimulus has been the cause of disappointment, with many market participants hoping that its fiscal policies will follow in the footstep of the financial ‘bazooka’ delivered in late-September, but there was clearly a step-down in yesterday’s announcement,” Yeap Jun Rong of IG said in a commentary.
The Shanghai Composite lost 5.1% to 3,311.02 after it gained 4.6% Tuesday, reopening from a national holiday. The CSI300 Index, which tracks the top 300 stocks traded in the Shanghai and Shenzhen markets, gave up 5.6%.
“Let’s call it what it is — an abject failure — as Chinese shares opened sharply lower, sending a clear signal that the market is no longer buying half-hearted promises,” Stephen Innes of SPI Asset Management said in a commentary.
In Tokyo, the Nikkei 225 index advanced 0.6% to 39,178.70. Shares of the Japanese retailer Seven & i Holdings soared more than 10% in early trading after media reported that Canadian convenience store operator Alimentation Couche-Tard had increased its takeover bid by about 20%.
Japan’s parliament was due to be dissolved on Wednesday to pave the way for a general election. Prime Minister Shigeru Ishiba is seeking to consolidate support after taking office last week, amid signs the Liberal Democrats’ ruling coalition remains shaky after Ishiba’s predecessor, Fumio Kishida, stepped down following a slew of scandals among the party’s lawmakers.
Australia’s S&P/ASX 200 gained 0.2% at 8,189.70. South Korea’s markets were closed for a public holiday.
On Tuesday, the S&P 500 rallied 1% to 5,751.13. The Dow Jones Industrial Average rose 0.3% to 42,080.37, while the Nasdaq composite led the way with a 1.4% rally to 18,182.92.
The 10-year Treasury yield edged down to 4.02 from 4.03% late Monday. The two-year yield, which more closely tracks expectations for what the Federal Reserve will do with overnight interest rates, slipped to 3.96% from 3.99%, late Monday, though it’s still near its highest level since August.
When Treasurys are paying higher yields, investors generally become less willing to pay very high prices for stocks and other investments. And Treasury yields had been storming higher over the last week following a suite of reports showing the U.S. economy remains healthier than expected.
Such reports, including one last week showing stronger hiring by U.S. employers than forecast, raise hopes that the economy will avoid a recession. But they also force traders to ratchet back expectations for how much the Federal Reserve will cut interest rates by, now that it has widened its focus to include keeping the economy humming instead of just fighting high inflation.
Oil prices extended gains as Hezbollah fired another barrage of rockets into Israel on Tuesday which heightening concerns over escalating tensions in the Middle East. Benchmark U.S. crude oil added 24 cents to $73.81 per barrel. Brent crude, the international standard, rose 12 cents to $77.30 per barrel.
In currency trading, the U.S. dollar edged up to 148.21 Japanese yen from 148.20 yen. The euro fell from $1.0983 to $1.0970.
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AP Business Writer Stan Choe contributed.
