Asian markets rise as investors digest Fed minutes; Lenovo soars over 11%

Asian markets rose on Thursday afternoon following an earlier slip in the morning as traders tried to interpret a release from the Federal Reserve.

Mainland Chinese shares recovered from an earlier slip to see gains by the end of the morning session, with the Shanghai composite advancing 0.36 percent while the Shenzhen component rose 0.775 percent. The Shenzhen composite also added 0.802 percent.

Hong Kong’s Hang Seng index also made a turnaround to rise 0.53 percent.

Hong Kong-listed shares of computer maker Lenovo surged 11.41 percent after the company announced a return to profit in the third quarter, surpassing market expectations. Profit for the quarter was $233 million, versus a loss of $289 million in the same period a year earlier when the world’s largest personal computer maker by shipments took a one-off hit, following U.S. tax reform.

Elsewhere in Asia, Japan’s Nikkei 225 gained 0.34 percent in afternoon trade while the Topix added 0.11 percent. Shares of Japanese conglomerate Softbank Group, however, slipped 0.63 percent.

The Kospi in South Korea was slightly higher, with shares of Samsung Electronics rising around 0.1 percent after the company unveiled its new series of Galaxy smartphones.

The ASX 200 in Australia rose around 0.72 percent as the heavily weighted financial subindex added about 1.3 percent. Shares of the country’s so-called Big Four banks gained: Australia and New Zealand Banking Group advanced 1.39 percent, Commonwealth Bank of Australia added 1.74 percent, Westpac gained 1.17 percent and National Australia Bank edged up 0.69 percent.

The ongoing trade negotiations between the U.S. and China remain the “main focus” for markets and are likely to “provide the next catalyst for a strong move in sentiment,” Rakuten Securities Australia said in a morning note.

“Hopes that the US will extent the March 1 tariff deadline are growing and any confirmation of this should provide a relief rally across stocks and risk trades with implementation probably leading to a strong sell off,” they said.

Fed minutes

Overnight on Wall Street, the Nasdaq Composite closed just above the flatline at 7,489.07, notching its eighth consecutive gain. The Dow Jones Industrial Average advanced 63.12 points to close at 25,954.44 and the S&P 500 rose 0.2 percent to finish at 2,784.70.

The moves followed the release of minutes from the Fed’s January meeting, which highlighted downside risks, including “the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions.”

The minutes showed extensive discussion of market conditions, particularly on the emphasis that Fed actions were having on prices of risky assets like stocks and corporate bonds.

The Fed also judged that a “patient” approach to interest rate hikes would be prudent as it continued to weigh various headwinds to growth.

“We think the Fed is in pause, it’s a lot more data-sensitive than it has been before,” Andrew Harmstone, head of global balanced risk control at Morgan Stanley Investment Management, told CNBC’s “Street Signs” on Thursday. “Arguably … there may be some regret as to having raised interest rates in December.”

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.475 after seeing an earlier session high of 96.580.

The Japanese yen traded at 110.76 against the dollar after touching an earlier session low of 110.87. The Australian dollar was at $0.7161 after seeing an earlier session high of $0.7207.

The onshore Chinese yuan traded at 6.6940 against the greenback while its offshore counterpart changed hands at 6.6919.

Oil prices rose in the afternoon of Asian trade, as the international benchmark Brent crude futures contract added 0.24 percent to $67.24 per barrel. The U.S. crude futures contract gained 0.47 percent to $57.43 per barrel.

Source: CNBC

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