January 23, 2024 (MLN): Asian shares mostly advanced, with Chinese stocks losing steam following an earlier rally on news of a fresh market rescue package, Bloomberg reported.
The yen and Japanese stocks fluctuated after the Bank of Japan stood pat on policy.
A gauge of Chinese firms listed in Hong Kong pared its gains to 2.7% after climbing as much as 3.8%. Authorities are seeking to mobilize about 2 trillion yuan ($278 billion), mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilization fund to buy shares onshore, according to people familiar with the matter.
However, in a sign of lingering skepticism about the effectiveness of such measures, the CSI 300 mainland benchmark swung back to a loss of 0.2% following a brief spike.
“The stock market package is a welcome measure, and shows some responsiveness from the authorities,” said Aninda Mitra, a macro and investment strategist at BNY Mellon Investment Management. “But at under 2% of its GDP, we fear this is still inadequate.”
Japanese equities steadied after swinging between gains and losses in the immediate aftermath of BOJ’s decision to maintain monetary policy settings and adjusted its economic projections while offering no clear hints as to the timing for a potential end of the negative interest rate.
Elsewhere in Asia, stocks in South Korea and Australia climbed. Meantime, India’s stock market has overtaken Hong Kong’s as the world’s fourth-largest share market for the first time in another feat for the South Asian nation whose growth prospects and policy reforms have made it an investor darling.
The lingering concerns about Chinese equities are in stark contrast to the US, where investors are weighing strong economic signals and prospects for corporate earnings.
Wall Street shares are shaking off a rocky start to the year on bets the Federal Reserve will cut rates and the artificial intelligence boom will keep fueling profit growth.
The S&P 500 hovered near 4,850 on Monday. Treasuries were flat in early Asia trading after 10-year yields declined two basis points to 4.10% Monday. The dollar was a tad weaker.
“The story is changing for bulls,” said David Donabedian at CIBC Private Wealth US. “Investor optimism had been driven by the belief there would be aggressive rate cuts by the Fed.
Now investor belief has pivoted to view the economy as bullet-proof. No matter how high-interest rates go, the economy will continue to glide right through.”
Last week’s record close for stocks in the US has pulled valuations back to the highs seen last July. But a closer look shows that the market isn’t as expensive as it appears, according to Citigroup Inc.’s Scott Chronert.
The latest warning for investors unleashing dovish monetary wagers across the board: Two-thirds of Bloomberg Markets Live Pulse respondents said that betting on early monetary easing is the “most foolish” among popular trades heading into 2024.
Back in Asia, Australia’s business conditions eased in the final month of last year while confidence remained at below-average levels, reflecting the central bank’s policy tightening campaign to tackle elevated inflation.
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Posted on: 2024-01-23T10:23:49+05:00
