BANGKOK– Stocks mostly rose in Asia on Tuesday, led by strong gains in Hong Kong and Shanghai after a report said Beijing plans to allocate about 2 trillion yuan ($278 billion) in support to stabilize weakened markets. Chinese.
Bloomberg’s unconfirmed report cited anonymous sources. He said China plans to tap offshore funds held by Chinese state-owned enterprises and also local funds.
Hong Kong’s Hang Seng rose 3.2% to 15,434.69 and the Shanghai Composite Index rose 0.7% to 2,776.06.
Shanghai had retreated amid selling from investors disappointed by China’s decision to keep the prime lending rate unchanged despite concerns about the outlook for the economy, which is expected to slow further after the post-pandemic recovery would fade faster than expected.
The Shanghai benchmark fell 2.7% on Monday. It has been trading at its lowest levels since 2019. The Hang Seng was down about 12% year-to-date as of Monday’s close.
Even if a substantial rescue plan helps contain losses, it may not be a panacea if it fails to generate the confidence needed to sustain market stability, Mizuho Bank’s Tan Boon Heng said in a commentary.
“China’s sustained sell-off is occurring despite a rally in global stocks. And rather than a delayed convergence in relative changes, with China reopening, the divergence has only worsened over time,” Tan said.
Tokyo’s Nikkei 225 index gave up earlier gains to fall 0.1% to close at 36,517.57. It has been approaching its all-time high of 38,957.44, set in December 1989, before the implosion of a financial bubble that ushered in an era of slowing growth.
The Bank of Japan cited “extremely high uncertainties surrounding domestic and foreign economies and financial markets” in saying it would continue its ultra-loose monetary policy, keeping its benchmark interest rate at -0.1%.
A policy statement also said the central bank “will not hesitate to take additional easing measures if necessary.”
Speculation that the BOJ would end the negative interest rate policy, implemented to stimulate spending and investment, has sent the Japanese yen sharply lower. As of Tuesday morning, the US dollar bought 147.62 yen, slightly down from 148.11 yen on Monday.
Elsewhere in Asia, South Korea’s Kospi rose 0.6% to 2,478.61 and Australia’s S&The P/ASX 200 added 0.5% to 7,514.90.
Bangkok’s SET remained largely unchanged.
On Monday, the S.&P 500 added 0.2% to 4,850.43. The Dow Jones Industrial Average surpassed 38,000 points, rising 0.4% to 38,001.81. The Nasdaq Composite gained 0.3% to 15,360.29.
Macy’s rose 3.6% after the retailer said it rejected a takeover offer from two investment companies, in part because it did not offer “compelling value.” SolarEdge Technologies rose 4% after it said it would cut 16% of its workforce, and NuStar Energy jumped 18.2% after Sunoco said it would buy the pipeline and storage company in a deal valued at $7.3 billion. dollars, including debt.
They helped offset a 24.2% drop for Archer Daniels Midland, which put its chief financial officer on leave. After receiving a request for documents from US regulators, he said he is investigating some of his accounting practices. ADM also said it expects to report full-year 2023 earnings below what analysts were forecasting.
Next week there will be a rush of companies reporting their results for the last three months of 2023, with approximately 70 S companies.&P500 on the calendar. They include American Airlines, Intel, Procter & Gamble and Tesla.
On Thursday, the government will give its first estimate of how strongly the economy grew during the last three months of 2023.
Economists hope it will show that the economy is still growing, but at a slower pace than during the summer. That’s what the Federal Reserve wants to see, because an economy that is too strong would keep upward pressure on inflation.
On Friday, the government will release the latest reading of the inflation gauge the Federal Reserve prefers to use. Economists expect it to show inflation held steady at 2.6% in December from the previous month.
Treasury yields have declined significantly since October on expectations of upcoming rate cuts. This, in turn, has considerably eased the pressure on the stock market and helped it rise further. Yields fell again on Monday.
The 10-year Treasury yield was at 4.09% early Tuesday, down from 4.13% on Friday and 5% in October.
In other trading, U.S. benchmark crude oil rose 9 cents to $74.85 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 6 cents to $80.12 a barrel.
The euro rose to $1.0912 from $1.0884.