Asian markets were mixed on Tuesday after falling on Wall Street, although Shanghai and Hong Kong shrugged off authorities’ pledge to boost investment in a range of stocks as they try to contain a long-running disaster.
Investors were still coming to terms with the prospect of US interest rates remaining at two-decade highs after a jobs report last week collapsed and a warning from Federal Reserve chief Jerome Powell that an imminent cut was unlikely.
While inflation continues to ease, central bank officials are cautious about pushing for lower borrowing costs, citing a still strong labor market and other indicators that the economy remains in rough shape.
This was added to by the data on Monday, with an index of activity in the services sector reaching a four-month high.
That reading “smashed any hopes of a silver price drop in the data to start the week,” said Stephen Innes of SPI Asset Management.
Asian markets take a hit as U.S. jobs hopes fall
“Overall, the… announcement underscored the idea that, if anything, the U.S. economy gained momentum last month.” At the margin, this suggests a possible resurgence of price pressures.
“Taking the jobs report alongside these data dealt another blow to expectations for rate cuts in March.”
All three major indexes on Wall Street ended in the red, with the Dow and S&P 500 hitting record highs several times in recent weeks, thanks to a rush to tech giants such as Amazon and Meta.
Asia also struggled, with Tokyo, Sydney, Seoul, Singapore and Manila falling.
However, Hong Kong and Shanghai — among the world’s worst-performing markets — enjoyed much-needed buying interest after a unit that controls corporate shares on behalf of the Chinese government said it had expanded the scope of investments.
Asian markets rise after Wall St’s tech rally
The announcement came a day after officials pledged to provide support to avoid wild swings.
But analysts have warned that while such moves could provide some short-term relief, the government needed to address long-term problems in the economy — particularly in the real estate sector — to restore confidence.
“Right now the market is looking for clearer signals of economic recovery,” said Marcella Chow of JPMorgan Asset Management.
βExpectations remain quite low β markets and investors are still struggling with the weak economic recovery,β he told Bloomberg News.
Keys around 02:30 GMT
Tokyo – Nikkei 225: Down 0.7 percent at 36,114.06 (break)
Hong Kong – Hang Seng Index: UP 1.9 percent at 15,804.76
Shanghai – Composite: UP 0.9 percent to 2,726.07
Dollar/yen: DOWN at 148.53 yen from 148.68 yen on Monday
EUR/USD: DOWN to $1.0743 from $1.0745
GBP/USD: UP at $1.2547 from $1.2536
Euro/pound: DOWN to 85.64 pence from 85.68 pence
The Bank of England freezes interest rates as inflation remains high
West Texas Intermediate: UP 0.1 percent to $72.88 a barrel
North Sea Brent crude: UP 0.1 percent at $78.09 a barrel
New York – Dow: DOWN 0.7 percent at 38,380.12 (close)
London – FTSE 100: FLAT at 7,612.86 (close)
Source: AFP