Asian Stock Market: China defends bulls from virus woes
|- Asian stocks trade mixed as concerns over China rate cuts, data battle Omicron fears.
- Japan’s Tokyo up for escalating virus-led activity controls, Beijing raises bars for entry.
- PBOC cuts 1-year MLF, China Q4 GDP came in upbeat but Retail Sales eased in December.
- China NBS Head cites big downward pressure on the economy.
Markets in Asia part ways from S&P 500 Futures while grinding higher during early Monday. The reason could be linked to China as data from the regional leader and comments from the National Bureau of Statistics (NBS), as well as the People’s Bank of China (PBOC) rate cut, hint at further easy money policies. Even so, virus woes and fears of the faster Fed rate hike challenge the equity bulls.
That said, the MSCI’s index of Asia-Pacific shares outside Japan drops 0.30% while Japan’s Nikkei rises 0.80% by the press time. That said, Australia’s ASX 200 prints 0.30% intraday gains but New Zealand’s NZX 50 drops 0.10% at the latest.
Further, Chinese stocks are mostly up whereas Hang Seng prints mild losses amid geopolitical concerns and fears of another round of financial market crisis due to China-linked companies listed in Hong Kong.
It should be noted that the PBOC cut 1-year Medium-Term Lending Facility (MLF) rate by 10 basis points (bps) to 2.85% before the China Q4 GDP rallied to 4.0% versus 3.6% expected and 4.9% previous readouts. Following the data release, NBS Head Ning Jizhe said that there was room for monetary policy to support growth while citing risks of big downside pressure on the economy.
Talking about the virus, China’s Beijing tightens the rule for entry into the capital city after a jump in the covid cases while Japan also discusses heightened virus-led restrictions for Tokyo on witnessing more than 20,000 daily infections for the third consecutive day.
Amid these plays, South Korea’s KOSPI drops over 1.0% as North Korea fired another ballistic missile whereas Indonesia’s IDX Composite declined 0.60% on softer trade numbers from Indonesia. Furthermore, India’s BSE Sensex remains indecisive around 61,270.
On a broader front, S&P 500 Futures prints 0.15% intraday losses whereas the US 10-yields rose 8.4 basis points (bps) to snap a four-day downtrend while closing at 1.793% on Friday.
Moving on, the key central bankers and top-tier data are likely to entertain investors during the current week. However, major attention will be given to the virus updates and Fed rate hike concerns.
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