Japanese stocks gained Tuesday morning while Chinese indices retreated for the first time in six days.
Tuesday, January 27, 2015
In China, the decline was the result of anxieties over a dip in the profit growth for Chinese industrial companies. Meanwhile, Japanese assets reached a 1-month high.
Hong Kong’s Hang Seng lost 0.4% following yesterday’s close at a 4-month high. The Shanghai Composite Index dropped 0.9% after its own strong close on Monday – a 5-year high. Japan’s Nikkei Average and Topix both increased 1.7%. In Korea, Seoul’s Kospi Composite Index gained 0.9%.
Overall, Asian stocks rose, reported Bloomberg. The MSCI Asia Pacific Index grew 1% in Hong Kong and is poised for the highest close since November 4. Asian investors are optimistic that Greece’s new parliament won’t force the country to exit the eurozone and trigger any kind of negative reaction by global markets.
“The Greek elections had the potential to unnerve the market,” Nader Naeimi, investment manager at AMP Capital Investors in Sydney, told Bloomberg by phone. “It’s quite encouraging that the new government and the EU are willing to negotiate. The market is in a risk-on mode.”
China and Japan markets move in opposite directions
A weak yen and subdued response to the Greek election pushed Japanese indices higher, while weak profit growth in China undermined Beijing markets, reported BBC.
In Japan, Toyota experienced 1.2% growth after announcing a new payment method for its factory workers – focusing on performance rather than tenure.
On the other hand, factory profits for China in 2014 grew at their slowest pace in two years.
This divergence is not necessarily an indication of a broader trend, as investors continue to analyze the unfolding situation in Greece and await more information from the US economy and other factors.
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