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Asia stocks cling to gains despite fears of China systemic risk

Friday 02.22 BST

Overview

Stocks in Asia were clinging to gains on Friday, shaking off a poor lead from the US, which finished fractionally lower.

Hot topic

Eyes were on listed companies controlled by a handful of large Chinese conglomerates after regulators in Beijing on Thursday ordered domestic lenders to check the “systemic risk” presented by “some large enterprises” that engaged in overseas buying sprees.

Hong Kong-listed shares in Fosun International, one of the companies under scrutiny, was up 1.2 per cent on Friday after a 5.8 per cent slide in the previous session, while HNA Holding Group was down 1.6 per cent after Thursday’s 6.1 per cent drop. Shenzhen-listed Wanda Film Holding, a subsidiary of conglomerate Dalian Wanda, added 1.1 per cent after requesting a trading halt on Thursday following a 9.9 per cent drop.

Equities

Japan’s Topix benchmark was fractionally lower, while the S&P/ASX 200 was up 0.1 per cent. Australian bank stocks were down following South Australia’s decision yesterday to impose a state-level tax on lenders, which would add to the federal government’s plan to impose a national levy on balance sheet liabilities.

Hong Kong’s Hang Seng was up 0.2 per cent. China’s Shanghai Composite and tech-heavy Shenzhen Composite was both down 0.4 per cent, while the CSI 300, which tracks the 300 biggest stocks on both exchanges, eased 0.3 per cent from an 18-month high.

Commodities

Oil was in recovery mode after a sharp midweek drop. Brent crude was up 0.2 per cent to $45.31 a barrel in Asia on Friday, having fallen below the $45 mark on Wednesday for the first time since early November. West Texas Intermediate gained 0.2 per cent to $42.83, but still remained in bear territory, which is defined as a fall of 20 per cent or more, from a February high.

Gold was up 0.1 per cent at $1,251.11 an ounce.

Forex

Currencies were mixed against the US dollar on Friday, with the dollar index down 0.1 per cent at 97.53.

The British pound was steadying after a whippy week, and was up 0.1 per cent at $1.269 ahead of Saturday’s one-year anniversary of the UK’s vote to leave the EU that prompted a record 8.1 per cent drop in sterling.

The Japanese yen was flat at ¥‎111.32 per dollar.

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