Asia Markets: Asian markets reverse course, make gains in topsy-turvy trading day


Asia-Pacific stocks largely returned to positive territory by midday, with Chinese equities recovering from much of their early declines.

After opening slightly lower, Shenzhen stocks — where smaller companies are generally listed, as opposed to more industrial-focused and state-owned firms in Shanghai — rebounded.

The Shenzhen Composite 399106, +0.68%   ended morning trading up 0.6% and the ChiNext climbed 1.7%. In comparison, the Shanghai Composite SHCOMP, -0.24%   fell 0.4% after logging its worst month of the year in November.

As for the Shenzhen market, “it’s quite reasonable for it to move higher given the recent pullback,” said Dickie Wong, executive director of research at Kingston Securities.

Hong Kong’s Hang Seng continued to be under pressure, with Tencent 0700, -2.41%   a primary cause. Ahead of the index’s rebalancing at day’s end, the Chinese internet giant fell another 2%, putting it into correction territory with an 11% decline from last week’s latest record high. The Hang Seng HSI, -0.29%   was down 0.1%.

Elsewhere, the Nikkei NIK, +0.59%   was up 0.1% in early-afternoon trading as broader market sentiment cooled in Asia following news that the Senate won’t vote on the Republicans’ tax-reform proposal until at least Friday. That briefly hurt the dollar and erased initial stock gains in Japan.

The Nikkei Stock Average had increased by as much as 1.3% early on, helped by the yen’s overnight weakness. But the currency’s reversal — the dollar JPYUSD, -0.030203%   fell to as low as ¥112.33 from ¥112.70 earlier — sent the Japanese stock index into negative territory for a time. The greenback was recently around ¥112.50.

The dollar-yen’s drop also came as the pair neared resistance around ¥112.79, said United Overseas Bank analyst Peter Chia.

Michael McCarthy, CMC Markets’ chief market strategist in Australia, said October economic data out of Japan early Friday was slightly better than some had thought. That could have some investors worrying about a change in accommodative policies by the Bank of Japan.

It has been a tough week for tech stocks globally. That’s especially the case for Samsung 005930, +0.67%  , which is down 8.2% despite slight gains today, on pace for its worst week in 5½ years. Korea’s Kospi SEU, +0.12%   was also up slightly while Taiwan’s tech-heavy Taiex Y9999, +0.38%   was up 0.3% after early weakness Friday.

Ahead of China’s stock-market open, Asian equities started well, thanks to a run to fresh record highs in the U.S. amid tax-reform optimism.

As the Dow industrials capped its eighth-straight month higher Thursday, the longest winning streak in 22 years, “equities in the U.S. are like a runaway freight train,” said Tim Kelleher, head of institutional foreign-exchange sales at ASB Bank in New Zealand.

But he added the overnight gain might be viewed skeptically as some of it could be attributed to end-of-month positioning.

Oil prices added to early gains in Asia by midday as investors continued to react to the Organization of the Petroleum Exporting Countries and Russia agreeing to extend production curbs. The decision had been expected by the market. U.S. and Brent futures were both up nearly 0.5%.

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