Fundamental analysis

Main Asian indexes advance significantly on Wednesday

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Key Asian indexes increased significantly on Wednesday, posting gains up to 2.4%. The S&P/ASX 200 edged up by 0.2%. Other indexes surged upwards: the KOSPI increased by 0.77%, the Nikkei 225 added 1.04%, and the Shanghai Composite rose by 1.06%. The Hang Seng Index and the Shenzhen Composite had the best performance of the trading session, gaining 1.45% and 2.32% respectively.

Asian indexes went up thanks to a number of factors, one of them being an earlier increase in the US stock market. American indexes rose following the release of statistic data, which suggest that the US economy is slowing down. The consumer confidence index decreased in October to 107.8 points from 102.5 in October, exceeding the expected decline to 106.5.

A weaker economy should in turn slow down inflation, leading to the Fed adopting less severe monetary policy measures. This would be good news for long-term investors, allowing them to return to the market.

The Nikkei 225 has reached the highest level in almost two months after three straight days of gains. Despite the index’s upside movement, investors abstain from making active bets at this point due to the beginning of the earnings season for the third quarter.

The best-performing stock on the Nikkei 225 was Denka Co., Ltd., which increased by 6.73% thanks to good earnings data and reports about the company’s planned deal to transfer its cement business to Taiheiyo Cement, Corp.

Other stocks which posted gains were M3, Inc. (+4.7%) and T&D Holdings, Inc. (+4.1%)

Shares of Toshiba, Corp. declined by 1.66%. Earlier, the company stock rose by 0.38% amid reports that the consortium led by Japan Industrial Partners would likely have to postpone its acquisition of Toshiba. The consortium has been unable to secure bank loans for the deal before the deadline.

Among other Japanese stocks which suffered losses on Wednesday were Tokyo Electron, Inc., (-0.68%), Lasertec, Corp. (-1.14%), and Renesas Electronics, Corp. (-2.14%).

On the Hang Seng Index, the biggest gainers were Alibaba Health Information Technology, Ltd. (+7.6%) and CSPC Pharmaceutical Group, Ltd. (+6.3%), as well as Wuxi Biologics (Cayman), Inc. (+5.7%).

Alibaba Group lost 1.3%, while JD.com, Inc. edged up by 0.3%.

On the KOSPI, Samsung Electronics, Co. advanced by 3%, while Kia, Corp. decreased by 0.8%

Shares of SK Hynix added 1.4%, despite the company announcing that it would cut its capital expenditure for next year by at least half after reporting a 60% decline in third-quarter profit due to falling demand for chips.

In Australia, consumer price rose by 7.3% in September up from 6.9% in August. Inflation has reached the highest point since 2018, which could lead to more aggressive monetary policy measures and a larger interest rate hike than previously expected.

Shares of Australia’s biggest companies BHP and Rio Tinto advanced by 0.1% and 0.6% respectively, pushing up the Australian index.

The material has been provided by InstaForex Company – www.instaforex.com


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