Asian stocks fluctuated as traders assessed how close the Federal Reserve is to peak interest rates after the latest US inflation report. Alibaba Group Holding Ltd. led losses in Hong Kong on a report that its early backer is moving to sell holdings.
(Bloomberg) — Asian stocks fluctuated as traders assessed how close the Federal Reserve is to peak interest rates after the latest US inflation report. Alibaba Group Holding Ltd. led losses in Hong Kong on a report that its early backer is moving to sell holdings.
On a day when the MSCI Inc.’s Asia Pacific Index swung between losses and gains, stock indexes in Hong Kong and China stood out with their losses. Emerging market currencies in Asia gained, tracking global peers as some investors bet that the the Fed will just hike one more time.
Shares of Alibaba fell as the Financial Times said SoftBank Group Corp. is selling the majority of its stake in the Chinese tech giant. At the same time, embattled property developer Sunac China Holdings Ltd. slid by a record when its stock trading resumed in Hong Kong after a yearlong halt, dragging sentiment down.
The SoftBank news “might cause some near-term pressure for Alibaba given that its early backer is pulling out,” said Steven Leung, UOB Kay Hian executive director. “Some investors who are optimistic about Alibaba’s overhaul plan may choose to buy on dips, once shares are down.”
US futures drifted higher on Thursday after both the S&P 500 and tech-heavy Nasdaq 100 closed Wednesday near session lows. The US dollar edged lower against its major peers, while Treasury yields stayed in a narrow range, with the two-year slightly below 4%.
US inflation data offered cues for both bond bulls and bears. While the year-on-year headline figure fell, core prices edged higher. Swaps markets showed the odds are still in favor of a quarter-point Fed hike in May, while traders maintained their expectations the central bank will cut rates later this year.
The moderation in inflation isn’t fast enough for the markets to see the Fed reacting by cutting rates starting in the summer, said Anna Rathbun, chief investment officer at CBIZ Investment Advisory Services. “We do believe that the Fed is going to stick to its hawkish higher-for-longer mantra,” she said on Bloomberg Television.
Read More: Fed Leans Toward Another Hike, Defying Staff’s Recession Outlook
Minutes of the Fed’s March meeting published Wednesday showed policymakers scaled back expectations for rate hikes this year after a series of bank collapses roiled markets. Fed speakers sent mixed messages, with San Francisco Fed President Mary Daly saying more rate hikes may not be needed, while Richmond Fed’s Thomas Barkin said “we still have a ways to go.”
On the economic front in Asia, Australian employers added 53,000 jobs in March from the prior month, more than double economists’ forecasts, to help drive the Australian dollar higher. China said March exports jumped almost 15% from a year ago in dollar terms, compared with estimates for a decline.
The yen swung to a loss after earlier gaining on haven demand when news broke that North Korea launched a suspected ballistic missile toward waters off its east coast. It promoted the Japanese government to warn residents to take shelter.
Elsewhere, oil was slightly lower and gold rose.
Key events this week:
- China trade, Thursday
- US PPI, initial jobless claim, Thursday
- US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
- Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, Friday
Stocks
- S&P 500 futures were little changed as of 11:58 a.m. Tokyo time. The S&P 500 fell 0.4%
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 fell 0.9%
- Japan’s Topix index was little changed
- Hong Kong’s Hang Seng Index fell 0.6%
- China’s Shanghai Composite Index was little changed
- Australia’s S&P/ASX 200 Index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was little changed at $1.0993
- The Japanese yen was little changed at 133.25 per dollar
- The offshore yuan was little changed at 6.8784 per dollar
- The Australian dollar rose 0.3% to $0.6714
Cryptocurrencies
- Bitcoin rose 0.6% to $30,145.53
- Ether was little changed at $1,908.74
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.41%
- Japan’s 10-year yield was steady at 0.46%
- Australia’s 10-year yield advanced five basis points to 3.29%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold rose 0.2% to $2,018.11 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Stephen Kirkland, Mark Cranfield and Jeanny Yu.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.