Most stocks in Asia advanced at the start of a week packed with major central bank policy decisions, with China equities lagging as traders hold out for signs of more policy support.
(Bloomberg) — Most stocks in Asia advanced at the start of a week packed with major central bank policy decisions, with China equities lagging as traders hold out for signs of more policy support.
Japanese stocks rose, boosted by a report late Friday that said Bank of Japan’s officials see little urgent need to address the side effects of their ultra-loose monetary policy. Steelmaker Posco Holdings Inc. surged a record 24% after it unveiled a second-quarter profit that beat estimates. The jump helped propel the Kospi Index to the highest since mid-June.
Things were less upbeat in Hong Kong and China as stocks declined. Chinese shares notched their worst week in four on Friday, despite a series of vows from Beijing to boost consumption and businesses. Global fund managers are bracing for prolonged gloom in markets although some are still hoping for strong policy support for the economy from an expected Politburo meeting.
“The market is high on expectations (for stimulus) but have so far refrained from expressing a strong view in financial assets,” Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note.
Meanwhile, jitters surrounding China’s developers may ease with Dalian Wanda Commercial Management’s plan to pay a yuan bond’s principal and interest. Dalian Wanda Group Co. is selling a stake in one of its entertainment units for 2.26 billion yuan ($314 million), raising the odds the Chinese conglomerate will avert default on a maturing dollar bond.
Contracts for US shares were largely steady in Asia on Monday after the S&P 500 closed little changed on Friday and the Nasdaq 100 saw continued selling in technology companies following a disappointing batch of results.
The yen rose after weakening more than 2% last week, with the sharpest part of the move coming following the BOJ report. Most major currencies traded within narrow ranges versus the dollar Monday.
Treasury yields were little changed across tenors in Asian trading hours.
Eyes on Central Banks
Earnings and central bank decisions will be in focus this week. US heavyweights including Alphabet Inc., Exxon Mobil Corp. and Meta Platforms Inc. are all due to report, while in Asia investors will be watching names including Samsung Electronics Co., Rio Tinto Ltd. and Hitachi Ltd.
Traders are positioning for the Fed and the European Central Bank to raise interest rates and to signal whether more hikes are likely. The BOJ is projected to stand pat, letting the rate gap with its peers widen as it waits for sustainable inflation.
“The Fed cannot take the risk of being surprised by a renewed surge in core inflation that would jeopardize inflation expectations, which have so far remained well anchored,” Franck Dixmier, global chief investment officer of fixed income at Allianz Global Investors, wrote in a note. “We cannot rule out a further adjustment in the autumn.”
In commodities, oil edged down after notching its fourth weekly gain amid tentative signs that global markets are tightening. Gold opened the week little changed after slipping against a stronger dollar on Friday.
Key events this week:
- Eurozone S&P Global Manufacturing & Services PMI, Monday
- UK S&P Global / CIPS UK Manufacturing & Services PMI, Monday
- US Conf. Board consumer confidence, Tuesday
- US new home sales, Wednesday
- FOMC rate decision, Fed Chair Powell news conference, Wednesday
- China industrial profits, Thursday
- ECB rate decision, Thursday
- US GDP, durable goods orders, initial jobless claims, wholesale inventories, Thursday
- Japan Tokyo CPI, Friday
- BOJ rate decision, Friday
- Eurozone economic confidence, consumer confidence, Friday
- US consumer income, employment cost index, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 1:14 p.m. Tokyo time. The S&P 500 was little changed Friday
- Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.3%
- Japan’s Topix index rose 0.9%
- Hong Kong’s Hang Seng Index fell 1.4%
- China’s Shanghai Composite Index was little changed
- Australia’s S&P/ASX 200 Index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was unchanged at $1.1124
- The Japanese yen rose 0.2% to 141.47 per dollar
- The offshore yuan fell 0.1% to 7.1977 per dollar
- The Australian dollar was little changed at $0.6732
Cryptocurrencies
- Bitcoin fell 1.3% to $29,744.47
- Ether fell 1.4% to $1,866.56
Bonds
- The yield on 10-year Treasuries advanced one basis point to 3.84%
- Japan’s 10-year yield advanced four basis points to 0.450%
- Australia’s 10-year yield declined one basis point to 3.99%
Commodities
- West Texas Intermediate crude fell 0.2% to $76.93 a barrel
- Spot gold fell 0.1% to $1,959.76 an ounce
This story was produced with the assistance of Bloomberg Automation.
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