Depressed sentiment from Wall Street resulted in a mixed Asian market on August 17. This offset positive impact from the oil price rise. The ASX 200 of Australia closed at 5.535.00- a nearly flat number which retraced the prior losses of almost 0.4 percent. The materials and energy sub-indexes advanced 0.83 and 1.91 respectively.
The New Zealand NZX 50 however showed a different result when it closed up at 0.6 percent or 44.35 points to end up at 7,355.02. The gains were led by the Japanese, with a 149.31 points rise in Nikkey 225 index, an up of 0.9 percent to end at 16,745.64. The Topix advanced 0.97 percent or 12.66 points to touch 1,311.13.
Things were not so good across the strait. The Korean Kospi diped 0.2 percent or 4.01 points to touch 2,043.75. The Hang Seng index of Hong Kong erased its earlier gains when it slipped 0.29 percent during the latter part of the afternoon. Chinese markets in the mainland went up a little higher with Shanghai composite moving up 0.01 percent or 0.19 percent to touch 3110.23. The Shenzhen composite went up by 6.47 points or 0.317 points to touch 2043.28.
China on August 16 announced its plans to open the stock market in Shenzhen to foreign investors. This decision was taken after the State Council informed that the government had already approved plans for launch of Shenzhen-Hong Kong Stock Connect. This particular program was modeled on Shanghai-Hong Kong Stock Connect and would allow investors based in Shenzhen to purchase stocks listed in Hong Kong and vice versa.
Analysts believe that this approval of Shenzhen-Hong Kong Stock Connect was a part of efforts by China to open its financial sector so it becomes much more competitive as per global standards. According to Sean Darby, Irene Zhou and Kenneth Chan of Jefferies, an announcement was expected by the markets post conclusion of a few recent technical issues. This Shenzhen-Hong Kong Connect is a a fall out of margin financed collapse of the mainland stocks which happened in 2015. According to strategists, China's continuation of monetary policy tools reform and the opening of the bond market, along with stock connect approval will reassure investors that financial reforms continued to be on course, despite a little tightening of capital account.