March 06, 2024 (MLN): Stocks in Asia advanced as investors focused on an upcoming press conference at China’s policy meeting after official announcements of an ambitious 5% growth target, as Bloomberg reported.
Traders also awaited testimony from Federal Reserve Chair Jerome Powell.
Equities in Hong Kong rebounded Wednesday, driven by Chinese tech giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd., while JD.com Inc. surged ahead of its fourth-quarter results. Mainland China stocks erased earlier losses.
“As far as the NPC’s impact is concerned, we believe that there is a bit of disappointment among investors on the outline of fiscal and credit measures put forward by Premier Li’s work report,” said Homin Lee, senior macro strategist at Lombard Odier, referring to the National People’s Congress.
“The short-term dynamic will be driven primarily by the tug of war between continued position squaring among foreign investors and the national team’s efforts to counter that,” he added.
A press conference with senior officials on Wednesday may provide more details around the government’s effort to boost consumption.
Central bank Governor Pan Gongsheng will brief journalists, alongside Commerce and Finance ministry chiefs and the new top securities regulator.
Elsewhere, Japan’s biggest bank expects the central bank to exit negative interest rate in two weeks and is positioning itself accordingly. Mitsubishi UFJ Financial Group Inc.’s view is much more definitive than the swap market, which rates the chances of Bank of Japan Governor Kazuo Ueda changing policy this month at about 50%.
“An end to low rates in Japan is in sight and while that is a consensus view, it still marks a pivot for the BOJ and could result in yen strength,” strategists including Herald van der Linde wrote in a note.
“That could be bad news for the market – it will hurt the earnings of exporters – and could impact equity flows in the region as mostly Asian funds have pouring money into Japan in the past few months,” strategists added.
Caution to Prevail
US benchmark indexes lost traction after a rally that has spurred concern about sky-high valuations, with caution prevailing before Powell heads to Capitol Hill for his semiannual testimony before Congress.
Powell is expected to reiterate the lack of urgency to cut rates at his testimony. Wall Street also weighed data showing the US service sector cooled, even as orders and business activity picked up.
The S&P 500 dropped 1%, while the Nasdaq 100 slipped almost twice as much. Tesla Inc. extended a two-day selloff to 11%, while Apple Inc. suffered its fifth straight loss. Contracts for US equities rose in Asian trading.
Treasury 10-year yields steadied Wednesday after falling six basis points to 4.15% in the previous session with Australian and New Zealand yields tracking those moves.
A gauge of dollar strength edged higher, gaining against most currencies in a Group-of-10 peers.
Meanwhile, Bitcoin steadied after hitting a record Tuesday for the first time in more than two years before rapidly retreating as traders took some profits.
In commodities, oil steadied after a decline as a report showed US inventories are continuing to expand, a sign supply may be running ahead of demand.
Gold was little changed after also surging to a record high in the previous session as expectations for US rate cuts and geopolitical tensions pushed it higher.
Copyright Mettis Link News
Posted on: 2024-03-06T09:48:09+05:00
