SHANGHAI (Reuters) – Asian stocks gained strength in the afternoon session on Wednesday after a shaky morning session, highlighting the lingering anxiety and uncertainty surrounding a heated trade dispute between China and the United States.
S & P 500 futures ESc1 rose 0.3 percent and pointing to possible gains on Wall Street after the main US indices. UU They closed down on Tuesday.
In Asia, bargain hunters decided to collect low-priced shares after the previous day's defeat. MSCI's broader index of Asia Pacific shares outside Japan .MIAPJ0000PUS bounced 1.1 percent after a 2.1 percent drop on Tuesday. The Nikkei .N225 of Japan rose 1.3 percent after falling into negative territory early in the day. KOSPI .KS11 from South Korea rose 1.4 percent.
In China, markets turned losses into profits as investors seemed wary of indications of government support.
The Shanghai Composite Index .SSEC was 0.5 percent higher in the early afternoon trade one day after falling 3.8 percent to a low of two years.
China's blue-chip CSI300 index .CSI300 gained 0.6 percent, and the Shenzhen composite index .SZSC rose 1.4 percent.
Hong Kong's Hang Seng index .HSI was 1.4 percent higher in the afternoon trade after closing 2.8 percent on Tuesday. The index of companies in China. HSCE reversed losses from the morning session, rising 0.9 percent.
In a working paper on Tuesday, China's central bank said the country should cut reserve reserve ratios (RRRs) of banks to increase market liquidity, highlighting concerns about trade, one day after the governor of the central bank urged investors to remain calm.
"It's fair to say that a RRR (cut) seems imminent … the only question is the magnitude," Sue Trinh, director of Asia FX Strategy at RBC Capital Markets in Hong Kong, said in a note.
An apparent bias towards a more flexible policy "goes against the regional bias towards higher rates to protect the currency's fall," he said, adding that the growing divergence of policies indicates the possibility of depreciation of the onshore yuan and Offshore
The rebound in stock markets occurs despite commercial tensions between the United States and China that show little signs of relaxation. On Tuesday, a White House business adviser said Beijing had underestimated the US president's determination to impose more tariffs.
Washington threatened Monday to impose a 10 percent tariff on $ 200 billion of Chinese products after Beijing decided to raise tariffs on $ 50 billion in US goods, in response to similar tariffs on Chinese products announced on Friday.
However, the yield on 10-year Treasury bonds US10YT = RR rose to 2.9022 percent on Wednesday afternoon after falling earlier to 2.8820.
The two-year yield US2YT = RR, which increases with the expectations of the operators of higher rates of funds from the Federal Reserve, was 2.5535 percent.
AUSTRALIA CATCH-UP RALLY
Aussie shares, which posted strong purchases throughout the day, rose 1.1 percent, supported by a weak local dollar AUD =. The Australian dollar rose 0.3 percent after touching a one-year low on Tuesday.
A more attractive dividend proposal and a weaker Australian dollar have made the market more attractive to foreign investors, said Ryan Felsman, senior economist at CommSec.
"Last year, the Australian market only rose 7 percent from the United States with 25 percent, we did not get the sugar hit from the corporate tax plan, so there is also some recovery in game, "he said.
The US dollar was stronger against the yen, with an increase of 0.2 percent to 110.20 JPY =.
The euro EUR = was 0.1 percent lower at $ 1.1574, while the dollar index .DXY, which follows the dollar against a basket of six main rivals, remained stable at 95,094.
U.S. CLc1 crude rose 0.7 percent to $ 65.55 a barrel, supported by a drop in US commercial crude inventories. But analysts said that trade concerns and disagreements within the Organization of Petroleum Exporting Countries (OPEC) over the increase in supply continue to hover over the market.
Iran said on Tuesday that OPEC is unlikely to reach an agreement on oil production this week.
Gold remained flat after falling near six-month lows on Tuesday with a strong dollar. Spot gold XAU = was marketed at $ 1274.54 per ounce. [GOL/]
Investors in cryptocurrencies were also affected by the losses after South Korea's virtual currency exchange Bithumb said it had been hacked and that 35 billion won of virtual money was stolen in the exchange.
Bitcoin BTC = BTSP was 1.9 percent lower at $ 6,607.45.
Andrew Galbraith report; Edition by Sam Holmes & Shri Navaratnam