Market Overview

Asia Stocks Recover After Two Day Slump


Asian stocks recovered from a two day decline, as geopolitical events took a turn which positively influenced the markets. The high tensions between Ukraine and Russia had played heavily on trading with Russia raising interest rates accordingly as it appeared that the countries’ two militaries could clash following the fall of Ukrainian President Viktor Yanukovitch.

However, the two countries appear to have pulled back from the brink as forces gathered in Crimea. Russia’s President Vladimir Putin ordered his troops back to their barracks in what seems to be at least a peaceful lull in tensions. The markets responded accordingly, with the MSCI Asia Pacific Index having climbed 5.9 per cent from a 4 February low, representing a return to an upward curve. Big individual winners were internet giant Tencent Holdings Ltd which picked up a 1.7 per cent boost, with Hong Kong shares recovering from a recent sharp decline in value.  In Japan, top developer Mitsubishi Estate Co gained an impressive 2.2 per cent yesterday.

The only real blip was on the Nikkei 225 Index in Osaka, where trading on futures was temporarily suspended for a short time due to a “human operational error.” It was soon rectified after disruption to trading lasting for around twenty minutes. However, those interested in binary options trading in particular should note that this individual example aside, Asian stocks were making gains across the board. The Straits Times Index in Singapore gained 0.6 per cent, followed by the NZX50 Index in New Zealand which picked up by 0.5 per cent. There was also positive movement in Australia where the S&P/ ASX200 Index received a 0.3 per cent boost.

Notably, the Thai SET Index increased by 0.5 per cent to reach its highest point since 19 December when anti-government protests began to take hold in the capital Bangkok. Foreign investors had dumped $3.9 billion of Thai shares since the local political tension kicked in. It appears that Thai stock is now set for a recovery, albeit gradual. 

There were some individual winners and losers of note too. AGL Energy dropped by 2.5 per cent thanks to a decision by the Australian Competition & Consumer Commission to block a deal for Australia’s second biggest energy company to purchase government-owned power plants in New South Wales. In Singapore though, energy giant Noble Group Ltd enjoyed a whopping 5.1 per cent boost after announcing that in is involved in a joint venture for the agriculture side of its business. 

The Crisis in Crimea is not the only world development to impact the Asian markets. The National People’s Congress annual meeting in China is poised to have a significant influence on proceedings. It is the first such gathering to be run by leadership duo President Xi Jinping and Premier Li Keqiang, who are thought to be keen to give markets a “decisive” role in the burgeoning Chinese economy. There is speculation that this week’s meeting could see state businesses opened to private investment, which could have real effects across the region and beyond.      

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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