Chinese shares rise, then fade as Beijing unveils stimulus details

TOKYO (AP) — Stocks rose in Shanghai on Tuesday as Chinese markets reopened after a weeklong holiday, but then gave back some of the early gains as officials in Beijing outlined details of recovery plans of the second largest economy in the world.

The Shanghai Composite rose 5.5 percent to 3,519.88, and in Shenzhen, Japan’s smaller market, the main index gained 5.3 percent. The Shanghai benchmark initially gained 10 percent but fell as officials at China’s main economic planning agency briefed reporters on a series of previously announced policies aimed at addressing key issues such as a slumping housing market .

Hong Kong’s Hang Seng fell 5.8 percent to 21,758.45 as traders sold to lock in profits from recent gains.

“The recovery in China’s markets has hit a wall, leaving investors deflated. The reopening wave from the week-long holiday barely had time to gather steam before fizzling out, and now the once-excited bulls are licking their wounds,” SPI Asset Management’s Stephen Innes said in a comment.

Elsewhere in Asia, markets were mostly lower.

Tokyo’s Nikkei 225 index lost 1.2 percent to 38,861.09. as the dollar fell to 147.91 Japanese yen from 148.18 yen. A weaker yen tends to push stock prices higher.

Seoul’s Kospi was down 0.5 percent at 2,596.38. Australia’s S&P/ASX 200 rose 0.2% to 8,187.10.

US stocks fell on Monday after Treasury yields hit summer highs and oil prices continued to rise.

The S&P 500 fell 1 percent to 5,695.94 and is still close to a record high set a week earlier. The Dow Jones Industrial Average fell 0.9 percent to 41,954.24, surpassing its own record. The Nasdaq composite fell 1.2 percent to 17,923.90.

It’s a standoff for U.S. stocks after rallying to record highs on relief that interest rates are finally moving back up now that the Federal Reserve has broadened its focus to include keeping the economy running instead of just battling high inflation. A blistering U.S. jobs growth report on Friday fueled optimism about the economy and hopes the Fed can get a perfect landing on it.

When Treasuries, which are seen as the safest possible investments, pay more in interest, investors become less inclined to pay very high prices for stocks and other things that pose a greater risk of losing money.

It’s harder to look attractive to income-seeking investors when a 10-year Treasury is paying 4.02 percent, up from 3.97 percent Friday night and 3.62 percent three weeks ago.

The two-year Treasury yield, which more closely tracks expectations for the Fed, rose more on Monday. It rose to 3.99% from 3.92% late Friday.

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Treasury yields could also feel a push up from the recent rise in oil prices. Crude oil prices rose on fears that worsening tensions in the Middle East could eventually lead to disruptions in the flow of oil.

Brent crude, the international standard, fell $1.23 to $79.70 a barrel. It rose 3.7% on Monday. Meanwhile, U.S. benchmark crude fell $1.24 to $75.90. It also gained 3.7% on Monday.

Stocks that are seen as the most expensive may feel the most downward pressure from higher Treasury yields, and the focus has been on Big Tech stocks. They have led most of the S&P 500’s returns in recent years and have risen at rates that critics have called exaggerated.

Apple fell 2.3%, Amazon fell 3% and Alphabet fell 2.4% to be one of the biggest weights on the S&P 500 on Monday.

One exception was Nvidia, which rose another 2.3%. Enthusiasm for artificial intelligence technology increased after Super Micro Computer jumped 15.8 percent after it said it recently shipped more than 100,000 liquid-cooled graphics processing units.

If Treasury yields continue to rise, companies will likely need to generate higher profits to boost their stock prices, and this week marks the start of the latest corporate earnings reporting season.

Analysts say earnings per share rose 4.2 percent over the summer for S&P 500 companies from a year earlier, led by technology and health care companies, according to FactSet. If those analysts are right, it would be a fifth straight quarter of growth.

In other trading early Tuesday, the euro rose to $1.0986 from $1.0977.

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AP Business Writer Stan Choe in New York contributed.