Chinese stocks lead losses in mixed Asia trade

SINGAPORE – Stocks in Asia-Pacific were mixed on Thursday as investors continued to watch the Covid situation in China along with movements in the Japanese yen.

Chinese stocks led the losses regionally, with the Shanghai composite shedding 2.26% to 3,079.81 while the Shenzhen component fell 2.703% to 11,084.28.

However, shares in Chinese oil company CNOOC soared more than 27% from their issue price when they debuted in Shanghai. Hong Kong-listed shares of CNOOC, on the other hand, fell 2.51%.

Hong Kong’s Hang Seng Index fell 1.25% to close at 20,682.22.

Investors were watching for signs of political support from Chinese authorities as the mainland continues to grapple with its most severe wave of covid since the initial outbreak in 2020. Its strict zero-covid policy has raised questions about China’s economic prospects. .

China remains “well positioned to further stimulate growth,” especially as inflation is “not really an issue” in the country right now, said Thomas Rupf, head of trade execution and chief investment officer for Asia at VP Bank in Singapore.

“The main priority is now clearly on the Covid side,” Rupf told CNBC’s “Squawk Box Asia” on Thursday. “We expect in the coming months, more specific measures also on the infrastructure side and they still have room to also slightly reduce rates.”

Japan’s Nikkei 225 gained 1.23% on the day at 27,553.06 while the Topix index advanced 0.67% to 1,928. South Korea’s Kospi rose 0.35% to close at 2,728.21.

In Australia, the S&P/ASX 200 rose 0.31% to close the day at 7,592.80.

MSCI’s broader index of Asia-Pacific shares outside of Japan lost 0.37%.

The Japanese yen traded at 128.13 per dollar after strengthening from levels above 129 against the dollar yesterday.

Still, the Japanese currency remains weaker compared to the levels below 126 seen against the dollar last week. The yen has struggled for weeks against the dollar amid expectations that the Bank of Japan will take longer to normalize monetary policy than the US Federal Reserve.

“Buying on dips will remain the theme as long as the Fed maintains its aggressive rhetoric and the BOJ continues its unlimited bond buying,” Frances Cheung and Terence Wu of OCBC Treasury Research wrote in a note on Thursday.

The US Dollar Index, which tracks the greenback against a basket of its peers, was at 99.952 after a recent drop from around 101.

The Australian dollar changed hands at $0.7451, still higher than the sub-$0.736 levels seen earlier this week.

Oil prices rose in afternoon Asian trading hours, with international benchmark Brent crude futures rising 1.65% to $108.56 a barrel. US crude futures rose 1.51% to $103.73 a barrel.