Asian Shares Broadly Higher As China Leaves Rates Unchanged
Asian stocks ended broadly higher on Monday despite hawkish comments from ECB and Fed officials and rising geopolitical tensions after North Korea launched two ballistic missiles into waters off the east coast of the Korean Peninsula early in the day.
Amid worries that more interest-rate hikes will depress economic activity, investors awaited minutes from the U.S. Federal Open Market Committee (FOMC) this week for fresh insights into Fed officials’ thinking on the pace of rate increases.
The dollar held steady amid fresh geopolitical tensions surrounding North Korea, China and Russia, with Beijing’s top diplomat labelling the American response to the balloon it shot down “hysterical”.
Yields continue to drift higher after several Fed officials stressed the need to keep raising rates to tame inflation.
Oil prices rose about 1 percent in Asian trading, after having suffered heavy losses last week on signs of improved U.S. supplies.
China’s Shanghai Composite index jumped 2.06 percent to 3,290.34 after the country’s central bank left rates unchanged, as expected.
Hong Kong’s Hang Seng index climbed 0.81 percent to 20,886.96 on optimism about China’s recovery from COVID-19.
Japanese shares ended on a flat note as bond yields ticked higher following spikes in U.S. Treasury yields last week.
The Nikkei average finished marginally higher at 27,531.94 as investors awaited testimony by the incoming Bank of Japan (BOJ) leadership team. The broader Topix index closed 0.39 percent higher at 1,999.71.
The yen consolidated in a narrow range against the backdrop of looming recession risks and geopolitical tensions.
While energy stocks led losses, tiremaker Yokohama Rubber soared 10.2 percent after posting strong earnings.
Seoul stocks eked out modest gains, with the Kospi average gaining 0.16 percent to settle at 2,455.12 after fluctuating earlier in the day.
Celltrion rose 1.5 percent and Naver added 1.6 percent while LG Energy Solution tumbled 3.2 percent.
Australian markets ended little changed with a positive bias as gains in financials offset weakness in the energy sector.
Health insurer NIB Holdings plunged 11.6 percent after its first-half earnings missed estimates. Fuel supplied Ampol gained 1.7 percent after posting record annual profit.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index fell 2.05 percent to 11,896.05, marking its worst session since June 14, 2022 ahead of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision due on Wednesday.
U.S. stocks ended mixed on Friday as yields on the 10-year and 2-year U.S. Treasury bonds hit levels not seen since November amid lingering worries about stubbornly high inflation and expectations the Fed will keep raising rates for longer.
The Dow inched up 0.4 percent but notched its third straight week of losses. The S&P 500 eased 0.3 percent and the tech-heavy Nasdaq Composite shed 0.6 percent.
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