NEW YORK (AP) — Stocks are mixed in Asia, where Chinese markets rose after a government investment fund announced it would step up stock purchases.
However, the gains in Shanghai, Shenzhen and Hong Kong were much smaller than the recent declines.
Oil prices rose and US futures were mixed.
China’s Central Huijin Investment, a sovereign wealth fund that owns China’s state-owned banks and other large government-controlled companies, is launching a stock index fund to support a depressed market under strong selling pressure from the real estate crisis and economic slowdown. He promised to expand his purchases.
The fund has regularly stepped up its purchases of shares in major state-owned banks and other companies to counter intense selling pressure in the Chinese market. On Monday, smaller market benchmarks in Shanghai and Shenzhen oscillated between modest gains and deep declines, while stocks of state-owned banks and other large companies rose.
By midday on Tuesday, Hong Kong’s Hang Seng rose 3.3% to 16,026.94, with gains led by technology stocks such as e-commerce giant Alibaba, which rose 7.4%, and Jingtocom, which rose 6.3%.
The Shanghai Composite Index rose 2.5% to 2,770.83.
Elsewhere in Asia, Tokyo’s Nikkei Stock Average fell 0.3% to 36,244.27 and South Korea’s Kospi fell 0.7% to 2,570.85.
Australia’s S&P/ASX 200 index fell 0.6% to 7,578.90. In Bangkok, the SET rose 1%, while India’s Sensex rose 0.2%.
Stocks on Wall Street fell on Monday as data showed the economy remains strong, potentially delaying the interest rate cuts investors are hoping for.
The S&P 500 fell 0.3% from Friday’s all-time high to 4,942.81. The Dow Jones Industrial Average fell 0.7% to $38,380.12, and the Nasdaq Composite Index fell 0.2% to $15,597.68.
As we approach the midway point of earnings season, about half of the S&P 500 companies, including many of the market’s most influential companies, have released their latest financial results. Estée Lauder soared 12% after reporting sales and profits that beat analysts’ expectations. Meanwhile, McDonald’s fell 3.7% despite reporting better-than-expected profits. Sales for the latest quarter were slightly below expectations.
Boeing Co. fell 1.3% after new problems were discovered with some of its 737 planes, potentially delaying the delivery of about 50 planes. The company and McDonald’s were two of the biggest reasons the Dow Jones Industrial Average lagged the market.
Stock markets were widely feeling pressure from further rises in bond yields, which rose as traders got the message that the Federal Reserve would not start cutting key interest rates as quickly as expected.
The Fed lowered the federal funds rate to its highest level since 2001 in an effort to curb high inflation. High interest rates intentionally slow down the economy by making borrowing more expensive and hurting investment prices.
Federal Reserve Chairman Jerome Powell reiterated in an interview on Sunday that the Fed could cut interest rates three times this year because of cooling inflation. But he also hinted again in an interview on “60 Minutes” that the Fed is unlikely to start in March, as many traders had originally hoped.
The yield on the 10-year U.S. Treasury note was 4.12% as of early Tuesday morning, down from 4.16% late Monday.
The Institute for Supply Management says a report shows the U.S. services industry is stronger than economists expected, led by health care and social assistance.
Such a signal could cause the Fed to maintain upward pressure on inflation, potentially extending the period before it cuts rates.
But there is also upside for stocks as the U.S. economy explodes due to concerns about a possible recession. Economic strength should drive the growth of corporate profits, which is another way to determine what stock prices will do over the long term.
In other trading Tuesday, benchmark U.S. crude oil rose 14 cents to $72.92 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard crude, rose 16 cents to $78.15 a barrel.
The dollar fell from 148.68 yen to 148.47 yen. The euro rose to $1.0752 from $1.0743.