Market Close Sep 10

Investors await ECB, US stimulus bill

China markets underperform on growing US tensions; Jakarta slammed by new lockdown measures; India's Reliance surges on reports of more big deals

Investors await ECB, US stimulus bill
The Indian conglomerate Reliance has more billion-dollar retail deals to announce very soon. File photo by Reuters.

(ATF) Hong Kong: Markets recovered from lows triggered by the tech sell-off with investors now watching the US' stimulus progress and the ECB rate decision later in the day.

A Republican bill for the next coronavirus aid package is expected to be worth around $300 billion and will be voted on later today. It is much below the $1 trillion plan Republicans offered in July and a fraction of the $3 trillion that the Democrats demanded.

Meanwhile, ahead of the ECB rate decision markets are not going to the meeting with much expectations in terms of deliverables.

“The key focus will be on how ECB's anchors inflation expectations and strength of EUR,” said Pooja Kumra, Senior European Rates Strategist at TD Securities. “With ECB's limits and tools it is certainly challenging on the inflation front. Meanwhile, the broader weakness of USD also limits how much Lagarde can support a weaker EUR.”

The euro gained 0.3% to $1.18 and the dollar weakened back to around 93 against a basket of currencies while gold advanced 0.1% to $1,950 per ounce.

Indian conglomerate Reliance shares surged 7.3% after it sold a stake to private equity firm Silver Lake and following reports the company is to offer a $20 billion stake in its retail arm to Amazon. There was no response to an Asia Times Financial request for comment. But the share surge pushed India’s Nifty benchmark up by 1.52%. Reliance has the biggest weightage in India’s benchmark.

Meanwhile, most of Asian markets ended with gains, although China and Indonesia were underperforming.

In Asia, Japan’s benchmark the Nikkei 225 advanced 0.88%, and Australia’s S&P ASX 200 rose 0.51%. But China’s CSI 300 benchmark ended flat and Hong Kong’s Hang Seng index fell, underperforming the region as fresh tensions have emerged between the world’s two biggest economies after Washington revoked visas for more than 1,000  Chinese nationals deemed as security risks.

“China has leveraged every aspect of its country including its economy, its military, and its diplomatic power, demonstrating a rejection of western liberal democracy and continually renewing its commitment to remake the world order in its own authoritarian image,” Chad Wolf, the acting secretary of the Department of Homeland Security, said.

The Jakarta stock index fell 5.01% after plans to re-impose a partial lockdown as early as Monday over fears that a surge in coronavirus cases – currently number over 207,000 – could cause its greatly strained health system to 'collapse'. 

Asian credit markets has become active after South Korea priced a 10-year sovereign bond and Linyi City Construction priced a 3-year bond. The Asia IG index has shrunk by a basis point to 58/59. CATL’s 2-part bond dealGuangzhou Metro’s dual tranche offeringXinyuan Real Estate’s puttable bondsTongyang Insurance’s ultra-long bond and ENN Energy’s greenbonds are in the market. And China National Chemical has hired banks for issuing bonds which could be dollar- or euro-denominated. 

ATF China Bond 50 Index: Industrial and financial names post biggest ATF index moves

Also on Asia Times Financial

Reliance 'offers big retail stake to Amazon'  

European companies fear 'punishment' amid China-Europe tensions

Jakarta to reimpose partial lockdown as virus cases emerge 

Asia Stocks

# Japan’s Nikkei 225 index advanced 0.88%

# Australia’s S&P ASX 200 added 0.51% 

# Hong Kong’s Hang Seng index eased 0.64%

# China’s CSI300 edged down 0.06%

# The MSCI Asia Pacific index added 0.92%.

Stock of the day

Yum China fell 5.3% on debut from its secondary listing selling price at the Hong Kong Stock Exchange. “The listing will help ease the risk of US de-listing stemming from the PCAOB move, and it will also widen its shareholding base to Asia investors, in our view,” Jefferies analysts said in a note. The US-listed and HK-listed shares will be fungible.