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Why Did Asian Markets Rise on January 16?

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Updated

Economic calendar

8:30 AM EST – US NY Empire State Manufacturing Index (January)

4:30 PM EST – API’s weekly crude oil stock

6:50 PM EST – Japan’s core machinery orders (November)

10:00 PM EST – China’s foreign direct investment

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China

After gaining for four consecutive trading days, China’s Shanghai Composite Index started this week on a weaker note by pulling back on Monday. After breaking an 11-day gaining streak on Monday, the Shanghai Composite Index opened lower on Tuesday. However, it regained strength as the day progressed.

The market sentiment is mixed this week since polls expect China’s economy to slow down in 2018. The Chinese government’s increased regulations to bring down the debt risks and factory pollution dented the economic growth outlook. On Tuesday, the market rose to two-month high price levels due to support from the real estate sector. The rally in real estate stocks pushed the China blue-chip index to 30-month high price levels.

The market is looking forward to the release of China’s foreign direct investment at 10:00 PM EST today. The Shanghai Composite Index rose 0.77% and closed the day at 3,436.59 on January 16. The SPDR S&P China (GXC) rose 1.5% on January 12.

Hong Kong

Hong Kong’s Hang Seng Index gained for five consecutive trading weeks due to increased funds from foreign investors, especially from China. The Hang Seng Index started this week on a stronger note by opening at elevated levels on Monday. However, it pulled back and closed the day with losses due to weakness in China’s market. On January 16, the Hang Seng Index opened higher and rose to record high price levels. Strength in the financials and energy sectors supported the market rally.

On January 16, the Hang Seng Index rose 1.8% and closed the day at 31,904.75. The iShares MSCI Hong Kong (EWH) rose 0.65% on January 12.

Japan

After closing almost flat last week, Japan’s Nikkei Index started this week on a stable note. On Tuesday, the improved earnings outlook and the yen’s pullback supported the Nikkei Index. The market is looking forward to the release of core machinery orders at 6:50 PM EST today. On January 16, the Nikkei Index rose 1% and closed the day at 23,951.81. The iShares MSCI Japan (EWJ) rose 0.32% on January 12.

Next, we’ll discuss how European markets performed in the early hours on January 16.

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