Shares in Asia mixed as China measures the weight: Markets Wrap
Shares in Asia mixed as China measures the weight: Markets Wrap

Shares in Asia mixed as China measures the weight: Markets Wrap

(Bloomberg) – Asian stocks on Tuesday were mixed with investors weighing Chinese measures to support the economy and the prospect of faster Federal Reserve policies to fight inflation.

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Shares were higher in Japan and South Korea, while Hong Kong fell and China faltered as investors assessed measures to tackle headwinds in the economy from Covid-led lockdowns. US futures rose after equities ended slightly changed in thin trading on Monday.

Government bond yields fell after the long end fell on Monday. St. Louis Fed President James Bullard said rate hikes of 75 basis points – although not the base scenario – should not be ruled out as the central bank has to move fast to fight inflation. Australian bond yields rose.

The dollar had an advance. The yen is in the middle of the longest losing streak in at least half a century. The oil returned some of its overnight gains.

Treasury yields are around the highest for more than three years, while investors discuss whether inflation is peaking. A jump in energy costs highlighted price concerns as US natural gas prices rose to the highest intraday level in more than 13 years.

Interruptions in supply chains from China’s shutdowns and goods flows from the war keep upward pressure on prices at a time when global growth is tipped to slow down. The World Bank lowered its forecast for global economic expansion this year on Russia’s invasion of Ukraine.

“Yield increases have often meant problems for equities, but we believe the past is an imperfect guide in a world shaped by supply shocks,” BlackRock Investment Institute strategists led by Wei Li, global investment strategist, said in a note. “We see central banks normalizing rapidly – but not slowing the economy. This should keep real returns low and support stock valuations.”

In China, markets are also awaiting the release of prime interest rates on loans on Wednesday, after the People’s Bank of China on Friday reduced the reserve ratio for most banks but refrained from lowering interest rates.

“The reluctance to loosen monetary policy further before Covid is under control means that market sentiment is likely to remain gloomy in the coming weeks,” the Gavekal Dragonomics team wrote in a note on Monday. “But, stocks will rise even harder if lockdowns lift and politicians begin to compensate for lost growth with further easing measures.”

Meanwhile, Ukrainian President Volodymyr Zelenskiy said on Monday that Russian forces had begun the campaign to conquer the Donbas region in eastern Ukraine, while Moscow continues to move troops and materiel into that part of the country.

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What to see this week:

  • Earnings include American Express, China Telecom, IBM, Johnson & Johnson, Netflix, Tesla

  • Chicago Fed President Charles Evans speaks Tuesday

  • EIA report on crude oil inventory, Wednesday

  • China’s prime interest rate on loans, Wednesday

  • Federal Reserve Beige Book, Wednesday

  • French presidential debate on Wednesday

  • San Francisco Fed President Mary Daly, Chicago Fed President Charles Evans, speaks Wednesday

  • Eurozone CPI, US first unemployment applications, Thursday

  • Fed President Jerome Powell, ECB President Christine Lagarde discusses global economy at IMF event on Thursday

  • Manufacturing PMIs: Eurozone, France, Germany, UK, Friday

  • Bank of England Andrew Bailey speaks on Friday

Some of the key movements in markets:

Equities

  • S&P 500 futures rose 0.3% from 10:38 in Tokyo. The S&P 500 was slightly changed

  • Nasdaq 100 futures rose 0.5 pct. Nasdaq 100 rose 0.1 pct.

  • The Topix index rose 0.6 per cent.

  • Australia’s S & P / ASX 200 index rose 0.7 per cent.

  • The Kospi index rose 1.1 per cent.

  • The Hang Seng index fell 2.2 percent.

  • Shanghai Composite Index rose 0.2 pct.

Currencies

  • The Japanese yen was at 127.08 per dollar

  • The offshore yuan was $ 6.3787 per dollar

  • The Bloomberg Dollar Spot Index was slightly changed

  • The euro traded at $ 1.0784

Bonds

Raw materials

  • West Texas Intermediate crude fell 0.5% to $ 107.70 per barrel. barrel

  • Gold was at $ 1,976.31 an ounce

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