Shares in Hong Kong and Tokyo outperformed the region to scale fresh multi-year highs on Thursday.
U.S. stocks closed higher on Wednesday as the mostly dovish minutes from the last Federal Reserve meeting helped markets overcome the impact of plunging energy prices. The tech-heavy Nasdaqoutperformed the other major indices, closing up 0.8 percent. The Dow Jones Industrial Average finished up 0.2 percent, while the S&P 500settled 0.3 percent higher.
Mainland stocks mixed
China’s Shanghai Composite index fell nearly 1 percent, while Hong Kong shares continued its blistering rally, surging nearly 3 percent for the day to hit seven-year highs. Meanwhile, the Hang Seng China Enterprises Index of Hong Kong-listed mainland companies soared 2.6 percent.
The rally was boosted by strong buying from Chinese investors who used up the entire 10.5 billion yuan ($1.69 billion) daily investment quota in the Shanghai-Hong Kong stock connect for the second straight session.
Analysts say investors are seeking arbitrage profits from the massive valuation gap between Hong Kong and Shanghai shares in the same companies. Cheap valuations after a “five-year bear market” also contributed to the upswing, according to John Hetherington, regional deputy head of Asia Pacific Research, Daiwa Capital Markets.
“There is no doubt that money flows originating from China are helping [but] after a five-year bear market in Hong Kong, there’s now a lot of [chatter] about how this market is finally starting to move [and as] valuations get off a low base, you get that extreme movement,” he told CNBC Asia’s “Squawk Box.”
Brokerage houses were among the top performers on the Hang Sengindex; China Galaxy Securities rocketed 13 percent, while Haitong Securities and Citic Securities climbed 7.8 and 2.5 percent, respectively. Actively traded stocks for the day include CCT Land andGome, which were up more than 40 percent each.
Nikkei gains 0.8%
Japan’s Nikkei 225 clinched a second multi-year closing high, ending the day at its highest level since June 2000 and in sight of the 20,000 milestone. The dollar-yen back above the 120 handle helped sentiment.
“USD/JPY is underpinning gains for the Nikkei, which is flirting with the 20,000 barrier. The last time the Nikkei was trading above 20,000 was back in April 2000 and needless to say, a break of this level will represent a significant psychological feat,” Stan Shamu, IG’s market strategist, wrote in a note.
Helping to prop up the bourse were exporter stocks; Sony notched up 2.7 percent, while Nissan Motor jumped over 4 percent after SMBC Nikko Securities hiked its rating to “outperform” from “neutral” citing likely strong sales.
After announcing plans of a merger on Wednesday, shares of Hyundai Steel and sister company Hyundai Hysco fell nearly 2 percent each.