China Stocks Extend Rally After PBOC Promised More Support, Yen Edged Lower

Arjun Pandit
05 Jan, 2023
Mumbai

Japan's market indexes closed higher following the weakness in the yen and China optimism lifted indexes in Shanghai and Hong Kong. 

The Nikkei 225 average gained 0.4% to 25,820.80 after the yen edged lower to 132.78 against the U.S. dollar. 

Tech stocks and exporters led the gainers in Tokyo trading today. Nippon Sheet Glass led the gainers with a rise of 7.5%. 

Softbank Group, Sony, Advantest and Tokyo Electron gained between 2% and 4%. 

Toyota Motor, Honda Motor and Nissan Motor fluctuated between a gain and a loss of 1% on the hopes that the revival in economic growth may lift global sales.   

The Chinese government said it will reopen its border with Hong Kong on January 8, nearly three years after halting travel between the mainland and the island to contain the spread of Covid virus. 

Hong Kong extended three week gains to 12% and 4% in the year so far after the People's Bank of China said it plans to provide more financial support to the struggling property sector after its annual work conference. 

Alibaba.com led the gainers after the company accelerated its restructuring of Ant Financial Services Group after the banking regulators permitted the company to increase its capital to 18.5 billion yuan from 8 billion yuan. 

The move will also allow the payment processor and financial services provider to expand its consumer base and potentially revive the listing of Ant Financial in Hong Kong. 

The Shanghai Composite index soared 1.1% to 3,155.22 and the Hang Seng index advanced 1.3% to 21,052.17. 

Market indexes in China rebounded despite the service sector activities contracted for the fourth month in a row in December, though the pace of decline fell. 

The Caixin/S&P Global PMI Services Index increased to 48 in December from 46.7% in November.