Chinese equities experienced gains on Wednesday, supported by the softness of the US dollar (USD) and lower US bond rates, which contributed to a positive sentiment across Asian markets. Investors are optimistic about the possibility of additional support measures from Chinese authorities to counter recent sell-offs in the country’s equities.

At the time of reporting, China’s Shanghai Composite Index rose by 0.95% to 2,815, while the Shenzhen Component Index increased by 2.60% to 8,670. However, Hong Kong’s Hang Seng Index dropped slightly by 0.22% to 16,101. Elsewhere in the region, South Korea’s Kospi was up by 0.96%, Japan’s Nikkei declined by 0.15%, and India’s NIFTY 50 gained by 0.14% to 21,957.

Chinese policymakers are engaged in discussions with President Xi Jinping to explore additional supportive measures, while the country’s securities regulator expressed plans to encourage more institutional investors, such as mutual funds and insurers, to participate in the stock market.

It is noteworthy that both the Chinese and Hong Kong stock markets have seen a significant decline in market value since their highs in February 2021, with approximately $6.1 trillion erased, largely due to concerns over a potential property crisis in the world’s second-largest economies.

Meanwhile, in New Zealand, the fourth-quarter Unemployment Rate rose slightly to 4.0% from 3.9% in the previous quarter, surpassing market expectations of 4.2%. The Employment Change for the same period showed a positive growth of 0.4%, compared to the previous reading of -0.2%, exceeding the market consensus of a 0.3% increase. This data is crucial for the Reserve Bank of New Zealand (RBNZ).

Looking ahead, investors are eagerly awaiting the release of the Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) on Thursday. The CPI inflation data is anticipated to decline by 0.5% year-on-year (YoY) in January, while the PPI figure is expected to decrease by 2.6% YoY for the same period. Additionally, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will announce its interest rate decision on Thursday at 4:30 GMT.