Hong Kong: Asian stock markets opened higher on Wednesday, continuing Wall Street’s gains, but worries about China’s debt-ridden real estate industry lingered.
In Hong Kong, Chinese real estate company Kaisa Group Holdings suspended share trading just before the opening bell, “pending the release by the Company of an announcement containing inside information”, according to a filing with the exchange.
Kaisa, China’s 27th-largest property firm but one of its most indebted, became the latest company to spook investors when it announced on Friday that it had failed in a bid for a debt swap that would buy it crucial time.
China’s real estate industry — a key growth driver in the world’s second-largest economy — has cooled in recent months after Beijing tightened home-buying rules and launched a regulatory assault on speculation.
These measures have caused headaches for several major developers, especially China Evergrande, which is China’s second largest developer and is dragged down by billions of dollars in debt.
On Tuesday, Evergrande missed the deadline for repaying some of its overseas creditors, which increased the possibility that it defaulted while preparing for a large-scale government-backed restructuring.
With the start of the Hong Kong trading day, the Hang Seng Index edged up by 0.06%.
In Tokyo, the benchmark Nikkei 225 index rose 1.20%.
Mizuho Securities said in a report that the Japanese stock market opened up higher, “because investors’ concerns about the Omicron coronavirus strain have faded and US high-tech stocks are encouraged by the rise”.
The Sydney stock market rose more than 1%, as did the Wellington stock market. Seoul, Jakarta and Taipei rose slightly, while Singapore fell slightly.
Wall Street stocks rose for the second consecutive trading day on Tuesday, as investors cheered for early signs that the latest Covid-19 variant may not be as serious as the earlier version. The technology-rich Nasdaq index rose 3%.
London stocks rose 1.5%, Frankfurt stocks rose 2.8%, and Paris stocks rose 2.9%, their best performance this year.
World stocks and oil had tanked on November 26 when news of the new variant first flashed across traders’ screens.
After a rollercoaster ride since then, investors are now optimistic over the outlook in the run-up to Christmas.
“It’s not that everything is perfect again,” said market analyst Patrick O’Hare at Briefing.com.
“It’s just that things are less bad, which is a perfect perception for a market that has seen some significant weakness beneath the index surface and believes things got overdone on those downside moves.”
The positive sentiment also spilled over to oil trading, where the main US contract, WTI, briefly gained 5 percent.