Asia stocks sink, Hong Kong rallies on reopening hopes

  • Stock Market News
Asia stocks sink, Hong Kong rallies on reopening hopes
Credit: © Reuters.

By Ambar Warrick Most Asian stock markets sank on Thursday as mixed economic signals from Japan and fears of a U.S. recession dented sentiment, although the Hang Seng index rallied on reports that Hong Kong plans to further relax COVID curbs

The Hang Seng index surged nearly 3% as a local media outlet said that the local government plans to follow China in relaxing more COVID curbs.

China on Wednesday announced the further relaxation of movement curbs and testing mandates in most major cities, its biggest yet loosening of anti-COVID measures.

The move indicated that Beijing plans to further scale back its strict zero-COVID policy, which could bode well for local markets that were battered by weakening economic trends this year.

Heavyweight technology stocks in Hong Kong logged strong gains after U.S. lawmakers scaled back plans for imposing curbs on the use of Chinese-made chips by the government. Semiconductor Manufacturing International Corp (HK: 0981 ), which was the main target of the curbs, saw its shares rise 1%.

Chinese markets were muted, given that the country is still grappling with a record-high daily increase in COVID-19 cases. Analysts expect cases to increase even further as Beijing relaxes curbs, which could spur some uncertainty over when the country will announce a full reopening.

The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes lost 0.2% each.

Broader Asian stocks sank on Thursday amid growing concerns over a global recession.

Japan’s Nikkei 225 index shed 0.6% after data showed the country logged an unexpected current account deficit in the third quarter.

But the country’s third-quarter GDP was also revised a shade higher, showing that the Japanese economy contracted slightly lesser than estimated thanks to robust business and consumer spending.

Still, high inflation and a weakening yen are expected to weigh on Asia’s second-largest economy in the coming months, especially as global economic conditions deteriorate.

Concerns over a potential U.S. recession rose this week, as several market participants warned that high inflation and interest could trigger such a scenario in 2023. U.S. inflation data due on Friday and next week is expected to provide more clarity on price pressures.

Markets are also cautious ahead of the Federal Reserve's last meeting for the year , which is set to conclude on Wednesday.

Bucking the trend, Indian stocks rose slightly on Thursday, supported by a positive economic outlook for the country. The Nifty 50 and BSE Sensex 30 indexes rose about 0.1% each and traded close to record highs.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or