HONG KONG : Asian shares moved higher on Thursday, supported by some positive news from struggling developer China Evergrande Group, while the dollar held near a one-month top after the U.S. Federal Reserve took a hawkish tilt overnight.
However, investors remained on edge about Evergrande’s future, with a major test to come later on Thursday when US$83.5 million in dollar-bond interest payments are due.
“It’s a long way to go yet in terms of this being resolved,” said Kerry Craig, global market strategist at JP Morgan Asset Management. “You’ll see some of the immediate fears of a huge collapse and contagion start to recede, but it will still be an issue that pops up because the property market and construction is such a massive part of the Chinese economy.”
Evergrande’s shares surged 23per cent on Thursday after a unit said on Wednesday, when the Hong Kong market was closed for a holiday, that it had “resolved” a coupon payment on an onshore bond.
The Hong Kong benchmark rose 1.6per cent, boosting MSCI’s broadest index of Asia-Pacific shares outside Japan, which gained 0.64per cent
Elsewhere, Chinese blue chips gained 0.74per cent, Australia’s benchmark rose 1.04per cent, and Korea’s Kospi fell 0.6per cent after returning from a three-day break to catch up with global falls earlier in the week.
U.S. stock futures, the S&P 500 e-minis, were up 0.31per cent.
Fears that Evergrande could fail to meet its obligations jolted global markets early this week as traders worried the giant developer’s issues could spill over to other property firms and banks. Concerns eased somewhat on Wednesday when the People’s Bank of China injected 90 billion yuan (US$13.9 billion) into the banking system.
Investors were also focused on the U.S. Federal Reserve, which said overnight it will likely begin reducing its monthly bond purchases as soon as November and signalled interest rate increases may follow more quickly than expected.
“The most striking part of what we learnt from the Fed was that market was very accepting of it,” Craig said.
The three major U.S. stock indexes closed up 1per cent, not far off where they were before the Fed announcement, and U.S. Treasury yields see-sawed, before largely taking the change in their stride. [.N]
The dollar rose after the Fed Chair’s remarks hitting a month-high of 93.526 against a basket of currencies particularly gaining against the euro and yen, but paused for breath in Asian hours
U.S. crude dipped 0.11per cent to US$72.15 a barrel. Brent crude fell 0.35per cent US$76.13 per barrel. [O/R]
Spot gold lost 0.24per cent to trade at US$1763.43 per ounce [GOL/]
(Reporting by Alun John; editing by Richard Pullin)
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