Asia’s major stock indexes saw another inconsistent day with investors eventually warming to China’s biggest ever mortgage rate cut while tech worries distracted traders in Japan.
China’s five-year loan prime rate was lowered by 25 basis points to 3.95%, bigger than the five to 15 bp cuts forecast by economists, but it still failed to significantly shore up investor confidence about prospects for the struggling property market and broader economy.
China’s bourses did finally move into the green but the broader market remained weak with shares in information technology, new energy and consumer non-essentials falling.
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The blue-chip CSI300 Index edged up 0.21%, while the Shanghai Composite Index rose 0.42%, or 12.19 points, to 2,922.73. The Shenzhen Composite Index on China’s second exchange was ahead 0.52%, or 8.29 points, to 1,612.46.
In Hong Kong, tech giants lost 1.2%, after rising 6.9% in the previous week, and mainland property developers slipped 0.4% in the early part of the session. But the Hang Seng Index had gained 0.57% by the close, or 91.90 points, to end at 16,247.51.
Japan’s benchmark stock index struggled for traction, remaining stuck this week some 1% below the all-time peak set over three decades ago, with traders wary ahead of Nvidia earnings that could test the chip sector’s AI euphoria.
China’s unexpectedly large rate cut gave Japanese stocks a boost in the morning session, but it proved to be short-lived, and the Nikkei share average ended the day down 0.28%, or 106.77 points, at 38,363.61. The broader Topix was also behind 0.28%, or 7.39 points, to 2,632.30.
The Nikkei is on the cusp of breaking its all-time high of 38,957.44, set on the final trading day of 1989 at the peak of Japan’s bubble economy. On Friday, the benchmark index pushed as high as 38,865.06 before pulling back into the close.
Japan’s chip-sector giants have been a driving force of the Nikkei’s nearly 15% surge this year, handily outperforming major peers, including the US S&P 500 and tech-focused Nasdaq Composite, which have gained about 5% each.
India Stocks Advance
Chip-testing equipment maker Advantest, for example, which counts Nvidia among its customers, has soared 40% in 2024, despite sagging 1% on Tuesday.
Elsewhere across the region, in earlier trade, Indian stocks advanced with Mumbai’s signature Nifty 50 index up 0.39%, or 86.95 points, at 22,209.20. South Korean shares fell 1% and MSCI’s index of Asia shares outside Japan slipped 0.1%.
US Treasury yields ticked up, as cash trade resumed following Monday’s US holiday. S&P 500 futures were 0.3% lower, as were European futures.
Ten-year US Treasury yields, up 10 basis points last week rose 1 bp in Asia to 4.30%. Two-year yields were steady at 4.65%. Moves in currency markets were modest though the dollar was strong enough to top 150 yen.
Ahead there will be a wary eye on Nvidia’s earnings report on Wednesday as investors discover whether it can beat already lofty expectations.
Commodity markets more broadly were steady in Asia trade with Brent crude futures flat at $83.53 a barrel. Gold held at $2,018 an ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 0.28% at 38,363.61 (close)
Hong Kong – Hang Seng Index > UP 0.57% at 16,247.51 (close)
Shanghai – Composite > UP 0.42% at 2,922.73 (close)
London – FTSE 100 < DOWN 0.12% at 7,719.53 (0937 GMT)
New York – Dow <> CLOSED (Monday)
- Reuters with additional editing by Sean O’Meara
Read more:
China Chops Mortgage Benchmark Rate to Boost Property Market
China’s Financial Watchdogs Vow to Maintain Strict Supervision
Foreign Direct Investment in China Falls 80% to Three-Decade Low
Nikkei’s Record Run Stalls, Tech Drags on Hang Seng
