World shares mixed; Chinese stocks in focus over mkt rescue plan

Last year, Beijing posted its first quarterly deficit in foreign direct investment since it began reporting the data in 1998. Even if a substantial rescue plan helps staunch losses, it might not be a panacea if it falls short of building the confidence needed to sustain market stability

Bangkok: World shares were mixed on Tuesday, while Hong Kong and Shanghai advanced after a report said Beijing plans to put about 2 trillion yuan ($278 billion) into supporting ailing Chinese markets. In early European trading, Germany's DAX lost 0.2 per cent to 16,651.29 and the CAC 40 in Paris fell 0.3 per cent to 7,394.04. Britain’s FTSE 100 edged less than 3 points higher, to 7,491.07. The futures for the S&P 500 and the Dow Jones Industrial Average slipped less than 0.1 per cent.

An unconfirmed report by Bloomberg cited unnamed sources saying that China plans to tap offshore funds held by Chinese state-owned enterprises and also local funds to stabilise the markets. Hong Kong’s Hang Seng jumped more than 3 per cent, but fell back slightly, ending the day up 2.6 per cent at 15,353.98 points. The Shanghai Composite index gained 0.5 per cent to 2,770.98. Shanghai's benchmark fell 2.7 per cent on Monday, nearing its lowest levels since 2019, China's Premier Li Qiang told a meeting of the State Council, China's Cabinet, that more had to be done to improve the quality of listed companies and to beef up supervision of markets, the financial news outlet Caixing reported.

The Hang Seng was down about 12 per cent so far this year as of Monday's close. It got an extra boost Tuesday from news that China's National Press and Publications Administration had removed from its website the full text of draft regulations for online gaming that recently had caused sharp losses for technology companies. A consultation period for the rules ended on Monday and it was unclear when or if a revised set of rules might be released. Investors have pulled out of China markets as the country's recovery from the shocks of the pandemic has faltered.

Last year, Beijing posted its first quarterly deficit in foreign direct investment since it began reporting the data in 1998. Even if a substantial rescue plan helps staunch losses, it might not be a panacea if it falls short of building the confidence needed to sustain market stability, Tan Boon Heng of Mizuho Bank said in a commentary. “China's sustained sell-off is taking place despite the rally in global equities. And rather than a delayed convergence in relative shifts, with the re-opening in China, the divergence has only worsened over time,” Tan said.

Tokyo's Nikkei 225 index gave up earlier gains to edge 0.1 per cent lower, closing at 36,517.57. It has been nudging closer to its all-time record of 38957.44 set in December 1989, before the implosion of a financial bubble that ushered in an era of slowing growth. Wrapping up a two-day policy meeting, the Bank of Japan cited “extremely high uncertainties surrounding economies and financial markets at home and abroad” in saying it would continue its ultra-lax monetary policy, with its benchmark interest rate staying at minus 0.1 per cent. A policy statement also said the central bank “will not hesitate to take additional easing measures if necessary”. Speculation that the BOJ would end the negative interest rate policy, put in place to spur spending and investment, has pulled the Japanese yen sharply lower. As of Tuesday morning, the US dollar bought 147.28 yen, down slightly from 148.11 yen late Monday.

Elsewhere in Asia, South Korea's Kospi rose 0.6 per cent to 2,478.61 and Australia's S&P/ASX 200 added 0.5 per cent to 7,514.90. Bangkok's SET sank 0.6 per cent and India's Sensex lost 1.1 per cent. On Monday, the S&P 500 added 0.2 per cent. The Dow topped 38,000 points, rising 0.4 per cent to 38,001.81.