Shanghai stocks hit two-month highs on steelmaker strength while Tokyo’s winning streak was extended as a weaker yen gave a broad boost to shares.

The FTSE Asia-Pacific index gained 0.4 per cent to 265.26, its highest level for a week, as regional inflation concerns took a back seat.

The Shanghai Composite index gained 0.9 per cent to 2,923.90, breaching the 2,900 level that had capped gains since December.

“Investors are confident that the index is in a strong rebound period and that boosted investors to buy some selective sectors such as steel,” Zhang Yanbing, of Zheshang Securities, told Reuters.

Steelmakers were buoyed after Wuhan Iron & Steel, China’s third-largest producer, joined Baoshan Iron & Steel, the biggest publicly listed group in the sector, in rasing prices for March delivery of steel products.

Wuhan Steel rose 1.6 per cent to Rmb4.60 while
Baosteel, which was raising its prices for a third month on higher demand, jumped 2.8 per cent to Rmb7.38.

Other industrial stocks also gained on expectations that these would be better placed than sectors such as real estate to resist the negative effects of Beijing’s tightening policies.

Changsha Zoomlion Heavy Industry surged the most in three months, up 6.7 per cent to Rmb15.05, after Credit Suisse said the machinery maker would benefit as investment drives growth. But Poly Real Estateled falls for developers, sliding 1.2 per cent
to Rmb13.31, after China’s banking regulator said loans should be prevented from flowing into speculation.

The Nikkei 225 Average firmed 0.6 per cent to 10,808.29 while the broader Topix index rose 0.5 per cent to 967.30 for an eighth session of gains, its longest winning streak for 18 months as Tokyo benefited from fund flows into Asian developed economies.

“A weaker yen doesn’t only mean buying exporters any more, it actually means ‘buying Japan’, and that’s why we’re not only seeing strong inflows into core blue chips but also lagging domestic demand stocks,” said Masayoshi Okamoto, of Jujiya Securities.

Elsewhere, BHP Billiton, the world’s largest mining company, sank 1.8 per cent to A$46.52 in spite of a $10bn share buyback, analysts noting that this was at the lower end of expectations. Sydney’s S&P/ASX 200 index closed flat at 4,930.20.

Get alerts on Asia-Pacific equities when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article