SINGAPORE- Asian shares rose to a one-week high as policy support put a floor under the battered Chinese stock market, while bonds were under pressure ahead of a European Central Bank meeting later in the day.
The Shanghai Composite rose 2 percent and was headed for its largest daily gain in six months. The blue-chip index rose more than 1 percent and the Hang Seng climbed for a third straight session to take it 9 percent above Monday’s 15-month trough.
All three indexes remain down for the year on investors’ frustration at the lack of large-scale response from Beijing to China’s economic slowdown, though Wednesday’s cut to bank reserve requirements has again raised expectations of official help.
“Ultimately what is going to get fundamentals back on track is meaningful improvement in confidence and sentiment,” said David Chao, global market strategist, Asia Pacific at Invesco.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6 percent , while markets in Japan and India that have benefited from global investors’ flight from China traded off recent peaks. The Nikkei dipped 0.1 percent .
In currency markets, the dollar has bounced from its lows after a survey showed US business activity picking up in January.
The Canadian dollar nursed losses after the Bank of Canada held rates but dropped language saying it was prepared for further hikes.
S&P 500 futures were flat in Asia, as were Nasdaq 100 futures A 6 percent drop in Tesla shares after the bell following earnings that missed expectations was offset by sharp gains for after an upbeat revenue forecast.
South Korea beat expectations for growth in the fourth quarter of 2023, though the Kospi slipped and the won was steady. Traders sold shares in chipmaker despite it turning a surprise quarterly profit.
Earnings from luxury behemoth LVMH Intel and Visa are also due later on Thursday.
Global bond markets have meanwhile been under pressure as traders pare back expectations for rate cuts. European Central Bank policymakers will likely try to pour further cold water on market pricing at the post-meeting press conference.
