(Bloomberg) – Most Asian stocks rose, led by gains in China and Hong Kong, as investors bet that the Chinese government’s latest stimulus package would provide a boost to the country’s plummeting stock market. did.
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Stocks rose in Hong Kong and mainland China, fueling Wednesday’s surge after the People’s Bank of China surprised investors with plans to cut banks’ reserve requirement ratios next month and hinted at more. . Stock prices in South Korea and Japan fell. SK Hynix Co., Ltd. is the world’s No. 1 company. Shares of the No. 2 memory chip maker fell as investors assessed fourth-quarter results and the outlook for the chip sector. US stock futures were little changed.
PBOC Governor Pan Gongsheng announced on Wednesday that the RRR will be cut by 0.5 percentage points on February 5 to inject 1 trillion yuan ($140 billion) in long-term liquidity. Regulators added additional measures to support struggling real estate and stocks following the People’s Bank of China’s announcement.
“Given valuation conditions, allocation to China could be an opportunistic transaction at this time,” VanEck Australia portfolio manager Alice Shen said in a note. “If future policy is successful in addressing these issues, we may look back to early 2024 as the best time to buy.”
Still, after a rocky start to the new year, questions remain as to whether this latest round of financial stimulus will be the panacea investors were hoping for. RRR cuts have not boosted Chinese stocks since 2020, with the CSI300 index falling nearly 4% in the three months following the cuts.
“The ultimate effectiveness of the latest rate cut remains in doubt, given that the two cuts early last year did not bring much improvement to the economic situation,” said Jun Rong Yep, market strategist at IG Asia. It will remain.” Yep said he still sees the PBOC’s move as encouraging “a temporary easing of extreme bearish sentiment towards Chinese stocks.”
Meanwhile, the dollar rose against all 10 major economies (G10), and in Asian trading, government bond yields rose after weak auctions pushed 30-year bond yields to their highest level this year. has stabilized.
In Japan, the yield on the benchmark 10-year government bond rose after a sharp rise on Wednesday as investors bet that the Bank of Japan was on track to end its negative interest rate policy by the end of the year.
Later on Thursday, the focus will turn to the European Central Bank. Policymakers are expected to keep interest rates on hold this week, but all eyes will be on clues about the path forward. Eurozone data on Wednesday showed private sector activity contracted again in January, indicating the ECB is holding off on cutting interest rates until June, Bloomberg Intelligence said.
In the United States, investors will be looking at a number of U.S. economic indicators, including gross domestic product (GDP), to be released on Thursday, as they ponder when the Federal Reserve will cut interest rates.
“Frankly, it all depends on the coming data, and the next few weeks will see significant developments that could shift the probability of a March rate cut in either direction,” said Paul Ashworth, chief North American economist at Capital Economics. There are many announcements to be made.” I have written. “We still think the Fed will cut interest rates by 25 basis points at its next meeting.”
Elsewhere, crude oil prices were trading near a one-month high after U.S. crude oil inventories were much lower than expected.
This week’s main events:
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Eurozone ECB interest rate decision Thursday
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Germany IFO Business Environment Thursday
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US GDP, new unemployment claims, durable goods, wholesale inventories, new home sales, Thursday
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Japan Tokyo CPI, Friday
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US Personal Income and Expenditures, Friday
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Bank of Japan issues minutes of policy meeting on Friday
The main movements in the market are:
stock
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S&P 500 futures were little changed as of 12:36 p.m. Tokyo time.
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Nasdaq 100 futures little changed
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Japan’s Topix remains almost unchanged.
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Australia’s S&P/ASX 200 rises 0.5%
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Hong Kong’s Hang Seng rose 1.5%
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The Shanghai Composite rose 2.1%.
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Euro Stoxx50 futures fell 0.1%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0878.
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The Japanese yen fell 0.1% to 147.68 yen to the dollar.
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The offshore yuan was almost unchanged at 7.1642 yuan to the dollar.
cryptocurrency
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Bitcoin rose 0.7% to $40,039.2
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Ether remains almost unchanged at $2,217.26
bond
merchandise
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West Texas Intermediate crude rose 0.4% to $75.40 per barrel.
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Spot gold rose 0.1% to $2,016.39 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Stephen Kirkland and Ruth Carson.
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