Chinese shares rise 2% as mainland stocks continue to see solid earnings for the week

Asia Pacific shares were mixed on Wednesday as concerns surrounding the coronavirus pandemic continued to linger.

Mainland Chinese stocks built on the solid run they’ve had so far this week as they led gains in the region for yet another day. The Shanghai composite closed 1.74 percent higher at around 3,403.44 while the Shenzhen component rose 1.841 percent to end its trading day at about 13,406.37.

Hong Kong’s Hang Seng index also added 0.42 percent, as of its final hour of trading.

Stocks in mainland China have seen a strong surge so far this week, with the Shanghai composite soaring nearly 6 percent on Monday. That came after the state-owned China Securities Journal said investors should look forward to the “wealth effect of the capital markets” and the prospect for a “healthy bull market.”

“There has been a lot of positive surprises in the market and that continue to fuel the market sentiment,” Frank Tsui, senior fund manager at Value Partners, told CNBC’s “Street Signs Asia” on Wednesday. “Near term, I think the positive sentiment will continue to be driving the market performance.”

Still, Tsui said investors should be “more cautious” and question whether the share price performance is being driven by fundamentals or purely based on sentiment.

Elsewhere, however, other major markets in the region saw losses on the day.

In Japan, the Nikkei 225 dipped 0.78 percent to close at 22,438.65 while the Topix index shed 0.92 percent to 1,557.23. Over in South Korea, the Kospi ended its trading day 0.24 percent lower at 2,158.88.

Meanwhile, the S&P/ASX 200 in Australia dropped 1.54 percent to close at 5,920.30.

Overall, the MSCI Asia ex-Japan index rose 0.49 percent.

A World Health Organization official said Tuesday that it shouldn’t “be a surprise” if coronavirus deaths start to rise again. Reported Covid-19 cases globally accelerated in June while the death toll has been falling. WHO officials warn that that there’s a lag between rising cases and increasing deaths. It takes weeks after contracting the virus to fall seriously ill and potentially die from the coronavirus.

Cases have recently spiked stateside with Texas reporting more than 10,000 additional Covid-19 cases Tuesday — a record-breaking daily surge.

In Asia Pacific, a recent uptick in cases in parts of Australia has prompted officials in Victoria state to impose stay-at-home restrictions in areas such as metropolitan Melbourne for six weeks.

Bank Julius Baer’s Mark Matthews told CNBC on Wednesday that there’s no way to “put a positive” on the lockdown in Australia’s Victoria state.

“The whole Australian story was basically a cyclical recovery story in the second half and … the domestic side of that will now be compromised,” said Matthews, who is head of research for Asia at the firm.