Asian markets were taken over by Chinese investors taking HongKong45 to 7-year highs and Japan225 close to 15-year peaks.
HongKong45 [Hang Seng] reached levels of 27990.0 on Thursday morning, the highest since January 2008. Equally impressive was the 19995.0 mark touched by Japan 225 [Nikkei], which was close to 15 year highs.
The flux on the equities markets was caused by a massive volume of investment from China as eastern investors buy what they consider to be bargain stocks. In fact, according to CNBC, Chinese investors used up ‘the entire 10.5 billion yuan ($1.69 billion) daily investment quota in a cross-border program for the first time.’
On forex markets, the USDJPY, which over the last month has reached 2007 levels above the 120.0 mark, is underpinning the strength of exports from Japanese and Asian markets into the U.S allowing Asian companies to benefit from advantageous exchange rates.
On the Japan225 index, two companies made notable gains; Sony was up by 2.3% and Nissan gained 4% – both firms have high export ratios.
However, all was not so positive on the Australian market as the Sydney200 index fell 0.4% due to poor performance on energy stocks such as BHP Billiton down 1.07% and Rio Tinto down 0.8%.
Reports from analysts are putting the surge in Asian stocks down to investors taking advantage of low prices being brought about by a five year bearish market. Japan’s monetary policies and quantitative easing programme that have, for the last 5 years, weakened the yen against the greenback, are now proving favorable to investors in Japanese firms.
MT4 chart: HongKong45
MT4 chart: Japan225
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