Asian Markets Press On With Rally, China Fund Boosts Optimism
Fahad Shabbir (@FahadShabbir) Published October 12, 2023 | 05:30 PM
Asian stocks extended the week's gains on Thursday, undeterred by forecast-beating US wholesale inflation data as investors grew increasingly hopeful the Federal Reserve would not hike interest rates further
Hong Kong, (UrduPoint / Pakistan Point News - 12th Oct, 2023) Asian stocks extended the week's gains on Thursday, undeterred by forecast-beating US wholesale inflation data as investors grew increasingly hopeful the Federal Reserve would not hike interest rates further.
The mood was enhanced by news that China's massive sovereign wealth fund had bought stakes in the country's biggest banks, fuelling speculation it could broaden its reach to support beleaguered mainland markets.
There has been plenty of optimism on trading floors in recent days after a US jobs report Friday was neither too hot nor too weak, while a string of central bank decision-makers have lined up to suggest they backed a pause in any more monetary tightening.
In the latest remarks, Boston Fed chief Susan Collins said the policy board was being more patient now that rates were at or close to their peak, while Atlanta boss Raphael Bostic said that unless prices surged again, officials did not need to keep hiking.
And Governor Christopher Waller adopted a "watch-and-see" approach.
While the producer price index (PPI) came in well above estimates Wednesday, analysts said it was seen more as a blip in a generally disinflationary environment.
The main focus is on the release of consumer prices on Thursday.
Wall Street's rise after the PPI contrasts with the risk-off reaction seen in recent months to other above-expectations figures that sparked heavy selling.
Minutes from the Fed's most recent policy meeting showed they would keep rates elevated "for some time" until inflation has been brought to heel.
"We do not forecast any additional rate hikes, but there are risks to this view depending on the evolution of GDP growth, labour market conditions, and inflation," said HSBC's Ryan Wang.
But while there remains some debate over whether the bank will lift rates again -- they are already at a 22-year high -- or stand still for much of next year, SPI Asset Management's Stephen Innes said one increase was unlikely to have much of an impact.
"Debating whether to fit in one more 25 basis point rate hike in 2023 is little more than a game of trivial pursuits," he said in a note.
"If the Fed's efforts thus far have successfully created a policy stance that's 'sufficiently restrictive' to control inflation, one more 25-basis-point hike won't make a critical difference.
"Conversely, if these efforts haven't controlled inflation by now, it will take more than one additional 25-basis-point increment to do the job."
- Salvaging confidence -
Asian markets continued the week's advances, with Tokyo and Seoul up more than one percent, while Sydney, Singapore, Mumbai, Manila, Taipei and Jakarta were also on the front foot.
Hong Kong and Shanghai also rallied on news that China's Central Huijin Investment -- an arm of the $1.4 trillion China Investment Corp -- had bought $65 million of shares in the country's banking giants.
Analysts said the purchase of stakes in Bank of China, Agricultural Bank of China, China Construction Bank, and Industrial and Commercial Bank of China was aimed at boosting sentiment in mainland markets, which have been hit by worries over the stuttering economy.
Huijin was also said to be planning to further boost its holdings. The banks were up between four and 5.5 percent in Hong Kong.
"The national team buying is a much bigger deal to the market and to confidence than the trove of measures including lowering the stamp duty in August," said Li Fuwen, at Guangdong Value Forest Private Securities Investment Management.
"What the market is in desperate (need) of now is a fresh source of funds, and even if it is just a few hundred million a day, this is the way to salvage confidence."
The move comes after a report said earlier this week that the government was looking at a huge sovereign bond issue to pay for infrastructure projects, the latest bid to prop up stalled growth.
London, Frankfurt and Paris were all up in the morning.
Oil prices edged up slightly, having dived Wednesday on easing worries about supplies linked to a possible widening of the Israel-Hamas conflict.
Both main contracts soared Monday on news of Hamas's shock attack on Israel, and Israel's retaliatory strikes, but they have since fallen back, and Brent is now below its Friday closing price.
On Thursday, the International Energy Agency the risk of disruptions because of the conflict was limited but that it stood ready to intervene if necessary.
Still, traders are keeping a nervous eye on developments.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: UP 1.8 percent at 32,949.66 (close)
Hong Kong - Hang Seng Index: UP 1.9 percent at 18,238.21 (close)
Shanghai - Composite: UP 0.9 percent at 3,107.90 (close)
London - FTSE 100: UP 0.3 percent at 7,643.84
Euro/dollar: UP at $1.0625 from $1.0621 on Wednesday
Pound/dollar: DOWN at $1.2301 from $1.2314
Dollar/yen: DOWN at 149.15 yen from 149.18 yen
Euro/pound: UP at 86.36 pence from 86.23 pence
West Texas Intermediate: UP 0.3 percent at $83.77 per barrel
Brent North Sea crude: UP 0.5 percent at $86.28 per barrel
New York - Dow: UP 0.2 percent at 33,804.87 points (close)
Related Topics
Recent Stories
Mohsin Naqvi has offered a substantial incentive, pledging $100,000 to every pla ..
Citizens join Al Barsha Police in “An Hour for Dubai” Initiative
Art can be a powerful tool to relieve stress, Experts say at Sharjah Children’ ..
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 5 May 2024
Today Gold Rate in Pakistan 05 May 2024
Bugti assures transporters for addressing their problems
Deputy Prime Minister and Foreign Minister, Mohammad Ishaq Dar meets foreign min ..
3 drug peddlers arrested, hashish recovered
1496,990 children given polio drops in five days: DC
Six terrorists killed, hideout busted in N Waziristan IBO: ISPR
Pakistan, Qatar agree to further expand trade, investment ties
Sindh cabinet approves Rs177.5m to strengthen, mobilize various wings of police
More Stories From Business
-
Pak-Saudi investment conference to be held on Monday
36 minutes ago -
NPO launches program for development of gemstone sector
4 hours ago -
PFC to take part in Riyadh Intel. expo
4 hours ago -
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 5 May 2024
9 hours ago -
Today Gold Rate in Pakistan 05 May 2024
10 hours ago -
CRD survey unveils 18% Pakistanis quit smoking
21 hours ago
-
NTUF granted patent for Innovative Multilayered Natural Fiber Composite Helmet
22 hours ago -
New industrial policy to be announced soon: Rana Tanveer
22 hours ago -
Commissioner orders implementation price control mechanism in toto
22 hours ago -
Jam Kamal holds meeting to tackle border area challenges
1 day ago -
Speakers in TIIF for improving, corporate governance system in Uzbekistan
1 day ago -
Pak-Uzbek business community welcomes KSA’s $20 billion investment in Uzbekistan
1 day ago