Source: AFP
Most Asian stocks rose on Thursday after another Wall Street record, with strong earnings, a resilient U.S. economy and Chinese moves to boost domestic markets competing with hopes of an early Federal Reserve rate cut.
Fresh comments from US policymakers pushing against cutting borrowing costs too soon have failed to overshadow a number of top companies this season, including Amazon and Facebook parent Meta.
With traders now resigned to fewer rate cuts this year, they are also now focusing on readings showing that US growth remained on track and jobs were still being created, all as inflation eased.
In the latest moves to temper bets on an unnecessary Fed pivot, Richmond Bank President Tom Barkin said he was “very supportive of being patient” in announcing the first rate cut, citing strong readings.
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And Gov. Adriana Kugler added that she wanted to wait until more data was available before moving.
While data continue to show that the battle against inflation is being won, policymakers are reluctant to cut too soon in case prices recover.
Still, New York traders were in good spirits, helped by healthy results from Disney, auto giant Ford and Chipotle Mexican Grill.
That helped the S&P 500 hit a new all-time high within a whisker of the 5,000 mark, while the Nasdaq and Dow also fared well.
“Higher interest rates don’t appear to be weighing heavily on consumers or firms, allowing the Fed to wait longer to get inflation under control without disrupting stock market momentum,” said Stephen Innes at SPI Asset Management.
“It is becoming increasingly clear that stocks are indifferent and indifferent to the Fed’s less damaging stance, which suggests that, unless there is a substantial deterioration in the labor market, the central bank’s baseline expectation for 2024 includes three rate cuts” .
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Asia was largely positive and Shanghai was sharply higher again, backing gains of nearly five percent over the previous two days, as investors cheered a series of pledges from Beijing to maintain a long-term path.
“A New Broom”
There was also positive reaction to news that the chairman of China’s securities regulator, Yi Huiman, had been replaced after overseeing a sell-off that has wiped trillions off companies’ valuations.
He will be replaced by banking veteran Wu Qing.
“This is long overdue, in my opinion, if one head can’t do the job, then maybe we should give someone else a chance,” said Jiang Liangqing, of Zhuhai Greenbamboo Private Fund Management.
“At least a new broom cleans up and he could be bolder in taking action instead of words.”
The announcement follows a series of measures and pledges aimed at boosting confidence at trading levels, including limiting short-selling by state-owned enterprises and the purchase of shares by China’s “national group”.
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But observers warned the moves would not solve the country’s deeper economic problems — particularly in the real estate sector — which needed to be addressed to fully restore optimism.
Data showing China’s consumer prices fell for a fourth straight month in January — and at the sharpest pace since 2009 — underscored the tough task leaders face in turning the ship around.
There were also gains in Tokyo, Sydney, Seoul and Manila, although Singapore and Wellington fell.
Hong Kong was also dragged lower by a more than six percent drop in market heavyweight Alibaba, which was hit by a worse-than-expected earnings report that overshadowed a huge stock market.
Keys around 02:30 GMT
Tokyo – Nikkei 225: UP 1.7 percent at 36,738.42 (break)
Hong Kong – Hang Seng Index: DOWN 0.6 percent at 15,980.32
Shanghai – Composite: UP 0.7 percent to 2,850.59
Dollar/yen: UP to 148.35 yen from 148.16 yen on Wednesday
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GBP/USD: UP at $1.2635 from $1.2628
EUR/USD: UP at $1.0783 from $1.0777
Euro/pound: UP to 85.34 pence from 85.32 pence
West Texas Intermediate: UP 0.4 percent to $74.17 a barrel
North Sea Brent crude: UP 0.4 percent at $79.53 a barrel
New York – Dow: UP 0.4 percent at 38,677.36 (close)
London – FTSE 100: Down 0.7% to 7,628.75 (close)
Source: AFP