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Hang Seng Flat Amid Tech Gains, Output Data Lifts China Stocks

There was an air of caution on Asia’s trading floors ahead of the US Fed’s latest update and news on the prospects for rate cuts any time soon


A woman is seen by a stock market board in Hong Kong
A woman is seen by a stock market board in Hong Kong. Photo: Reuters

 

Asia’s major stock indexes posted mixed results on Wednesday with investors on edge ahead of a US Federal Reserve meeting that will reveal the central bank’s thoughts on long-awaited rate cuts.

Markets have pushed back the timing for the first Fed cut to June, and maybe even July, due to recent data showing inflation has remained sticky.

Nevertheless, Chinese stocks edged up, as investor sentiment improved slightly on upbeat data released this week, even as concerns over the country’s consumption and property sector lingered.

 

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January-February data released on Monday appeared to point to a good start to 2024, but investors are concerned about data credibility, weak demand, deflation, credit growth slowdown and a lack of effective policies.

China’s blue-chip CSI300 Index climbed 0.22%, while the Shanghai Composite Index gained 0.55%, or 16.93 points, to 3,079.69. The Shenzhen Composite Index on China’s second exchange was ahead 0.61%, or 10.90 points, to 1,806.61.

China’s CSI 300 real estate index edged down 0.08%, with state-backed Vanke in the spotlight as the country’s property sector continued to struggle.

China left benchmark lending rates unchanged at a monthly fixing on Wednesday, in line with market expectations, after the central bank kept a key policy rate steady last week amid some signs of improvement in the broad economy.

In Hong Kong, shares of China’s Tencent Music Entertainment jumped 9% after the company beat revenue estimates on Tuesday, while the benchmark Hang Seng Index edged up 0.08%, or 13.59 points, to 16,543.07.

Elsewhere across the region, in earlier trade, Mumbai, Seoul, Singapore, Wellington and Manila rose, but there were losses in Sydney, Taipei, Jakarta and Bangkok. Tokyo was closed for a holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%.

European markets were set to open lower, with Eurostoxx 50 futures down 0.4% and FTSE futures 0.1% lower. Both US futures were off 0.1%.

 

Focus on US Fed, ECB

While Japan’s historic shift away from negative interest rates and massive stimulus ushered in a new era of economic policy for the nation, analysts expect the BOJ’s monetary normalisation to proceed at a glacial pace. 

The focus is now on the Federal Reserve policy meeting outcome later in the day where the risk is the new economic projections – the dot plot – could signal just two interest rate cuts, down from three, or a later start to the policy easing.

A slew of European Central Bank officials including Christine Lagarde will also be speaking later in the day. Some officials have endorsed June as the likely month to start discussing ECB rate cuts.

The dollar gained 0.4% to 151.51 yen, a fresh four-month high, and moved closer to the 152 level that prompted Japanese authorities to intervene to stem the currency’s slide in late 2022. It slumped about 1.1% overnight.

The euro and the Australian dollar gained new ground on the yen. The euro hit 164.66 yen, the highest since 2008, while the Aussie fetched 98.90 yen, just a notch below a nine-year high.

Oil prices retreated from multi-month highs on a strong dollar. Brent eased 0.2% to $87.18 a barrel, while US crude lost 0.3% to $83.21 per barrel.

Gold prices were steady at $2,157.32 per ounce, some distance away from the record high of $2,194.99 hit this month.

 

Key figures

Tokyo – Nikkei 225 <> CLOSED

Hong Kong – Hang Seng Index > UP 0.08% at 16,543.07 (close)

Shanghai – Composite > UP 0.55% at 3,079.69 (close)

London – FTSE 100 < DOWN 0.31% at 7,714.52 (0937 GMT)

New York – Dow > UP 0.83% at 39,110.76 (Tuesday close)

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

BOJ Split on When to End Negative Rates, so Ueda Bit the Bullet

China Bonds Bonanza Fuelled by ‘Asset Famine’, Property Woes

China Ups IPO Rules to Protect Investors With ‘Teeth And Horns’

Nikkei Boosted by BoJ Rates Pivot, Tech Drags on Hang Seng

 

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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