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Summary
- Japan leads the APAC rally.
- ASX200 touches a new record level.
- Afterpay shares surge 19% after the acquisition announcement.
The equity markets across the Asia Pacific region seemed to move past the gloom of last week, as they traded in green in Monday morning.
The rally in APAC stocks happened despite the US markets regulator asking Chinese firms, wanting to list in the US, for additional disclosures amid tech crackdown in China.
The rally in APAC shares was led by Japan, where the benchmark Nikkei225 had surged 1.83% in the first half of the trade. On the other hand, Topix had surged by 1.71%.
Down Under, in Australia, the benchmark ASX200 also rallied heavily and was up 1.44%. The index breached the 7,500-mark for the first time in history.
Shares of Australian fintech major Afterpay Ltd (ASX:APT) rallied by a whopping 18.98% after Square Inc, the payments firm of Twitter Inc (NYSE:TWTR), announced that it will buy Afterpay for US$29 billion. This happens to be the biggest buyout of any Australian company in the history.
Despite witnessing early selling pressure, stocks in Mainland China and Hong Kong have rebounded by the day. In Hong Kong, the Hang Seng index was up 1.44%. In Mainland China, the Shanghai Component was up 1.05%, while the Shenzhen Component was up 0.86%.
The rally in China and Hong Kong happened despite a gamut of factors weighing these markets down. As Chinese tech companies were facing a regulatory purge by its own government, the US Securities Exchange Commission, during the weekend, said that they would have to come up with more regulatory disclosures to get listed in the US.
Also, China’s Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) for July came in at 50.3, much lower than expectations of 51.1. It was also lower than that of June, when it stood at 51.3.
PMI readings above 50 represent expansion, and anything below that level signals contraction. The PMI is sequential in nature and represents month-on-month expansion or contraction.
Morgan Stanley Capital International’s broadest index of Asia-Pacific shares outside Japan traded 1.21% lower.
