Asian markets staged a comeback on Wednesday after struggling for the past few days. As of 1:06 p.m. HK/SIN, Hong Kong’s Hang Seng Index was up 0.41 percent, while Japan’s Nikkei 225 enjoyed a 0.54 percent gain. South Korea’s Kospi was, thus far, the biggest gainer in the session, up 1.15 percent and Australia’s ASX 200 was close behind with a 1 percent gain. Only Chinese stock indexes lagged behind, pressure by continuing tensions between Beijing and Washington. The Shanghai Composite was down 0.59 percent in the early afternoon after sinking 3.8 percent on Tuesday to hit a two-year low.
Chinese markets remained in the red despite several optimistic signs, including declarations of confidence from the media on Wednesday in the Shanghai Securities News. The article noted that there has been a steep decline in the market lately which reflects short-term pessimism, but that investors should approach the market rationally rather than emotionally to find long-term potential. As noted by CNBC, a separate article in the China Securities Journal highlighted the country’s fundamentals and called the economy “fully resilient,” while noting that the current “opportunity is greater than the risk.”
Another move that should have restored investor optimism was the announcement that 30 firms listed on the Shanghai Composite were launching share buyback programs. On Tuesday, the People’s Bank of China recommended a move to increase market liquidity by cutting banks’ reserve requirement rations.
Nevertheless, trade tensions between China and the United States seem to be weighing on investors’ minds. The decrease in risk appetite was also reflected in a slide on 10-year Treasury notes, which slipped to 2.8894 percent from 2.9 percent.