Asian stocks outside of Japan rose from a three-year low, led by late afternoon rallies in Hong Kong and Shanghai. The Nikkei 225 Stock Average erased its 2015 gain as shares in Tokyo sank.
Great Wall Motor Co. jumped 16 percent in Hong Kong after the Chinese carmaker reported increased vehicle sales for August. Samsung Electronics Co. gained 1.7 percent in Seoul after a report the world’s biggest smartphone maker is preparing to cut 10 percent of workers at its headquarters. Nomura Holdings Inc. sank 3 percent after Barclays Plc cut its rating on Japan’s biggest brokerage.
The MSCI Asia Pacific Excluding Japan Index gained 2 percent to 392.1 as of 6:18 p.m. in Hong Kong, climbing for the first time in seven days and rallying from the lowest level since June 2012. The Shanghai Composite Index surged 2.9 percent in late trading, a pattern that’s associated with state buying. China’s government spent $236 billion from June through August trying to shore up stocks, according to Goldman Sachs Group Inc.
“State funds may be focusing the purchase on some large companies including financials and helping with a rebound in the broader market,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. “Trading is very volatile as the volume is extremely thin.”
The value of shares traded on the Shanghai Composite on Tuesday was 80 percent below its June 8 peak, while volume on CSI 300 Index futures contracts shrank on Monday to its lowest level since October 2012 -- and 99 percent below its June high. The China Financial Futures Exchange last week moved to limit trading of stock-index futures by lowering the bar for “abnormal trading” and increased margin requirements and settlement fees.
Hong Kong Rally
Hong Kong’s Hang Seng Index jumped 3.3 percent, while the Hang Seng China Enterprises Index of mainland companies traded in the city surged 4.1 percent. Australia’s S&P/ASX 200 Index added 1.7 percent as banks advanced. New Zealand’s NZX 50 Index added 0.7 percent and Singapore’s Straits Times Index climbed 1.2 percent. Taiwan’s Taiex index gained 0.2 percent.
Japan’s Nikkei 225 dropped 2.4 percent, taking its losses since a peak on June 24 to 16 percent. The broader Topix index slipped 2 percent to to be within 1 percent of also erasing this year’s gain. Japanese shares have been among the world’s worst performers since China’s unexpected yuan devaluation on Aug. 11 roiled markets and drove a flight out of Asian equities.
A report Tuesday confirmed Japan’s economy shrank in the second quarter, while revising the size of the contraction to less than previously estimated. Separate figures showed Chinese exports slumped in August, adding to growth pressures facing the world’s second-largest economy.
E-mini futures on the Standard & Poor’s 500 Index rose 2 percent. U.S. markets reopen Tuesday after the Labor Day break.
Futures traders are pricing in a 30 percent likelihood of an increase in U.S. interest rates this month, with the Federal Reserve set to announce its next policy decision on Sept. 17.
“While there are opportunities out there, there’s no rush to pick the bottom at this stage given prevailing uncertainties over the slowdown in the Chinese economy and the timing of the U.S. interest-rate increase,” Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “Investors probably want to sit tight and watch developments closely.”