Equities: Asian markets benefit from a respite after strong selling pressure

Philippine Stock Exchange (PSE) at the PSE Tower in Bonifacio Global City, Taguig. (PHOTO APPLICANT / GRIG C. MONTEGRANDE)

HONG KONG — Asian markets posted much-needed gains on Thursday after suffering a troubled week so far, with sentiment boosted by favorable buying, a positive lead from New York and Europe and fresh promises of economic support for the Chinese economy.

However, traders remain on high alert amid a series of crises related to the war in Ukraine, soaring inflation, central bank monetary tightening and China’s COVID-19 lockdowns.

The current earnings season has seen a mixed bag of results that have weighed on tech companies, although reading from Meta, Facebook’s parent company, was encouraging on Wednesday, which analysts said could provide some relief. relief to the area. Apple and Amazon are expected later this week.

Traders were also encouraged by a report by state broadcaster CCTV that said officials had promised to push forward more policies to boost employment.

He quoted Premier Li Keqiang as saying on Wednesday that stabilizing the labor market was “key support” for keeping economic growth within an appropriate range.

The comments come as unemployment has surged in recent months due to lockdowns in key cities, including Shanghai, which were put in place to tackle a Covid outbreak but have hammered the economy and threaten global growth.

Beijing’s top brass have made several announcements in recent weeks to boost morale. Xi Jinping on Tuesday called for an “all-out” campaign to build infrastructure, while the People’s Bank of China reduced the amount of cash banks must hold in reserve to free up money to lend.

And Vice Premier Liu He pledged to ensure stock market stability and support overseas stock listings.

But investors remain skeptical as officials have so far provided very little concrete on the political front, with analysts saying the main hurdle for stocks is leaders’ refusal to back down from their drive to eradicate Covid.

Hong Kong and Shanghai were up in early trading, while gains were also recorded in Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta.

However, “risky assets in general are still having to deal with the consequences of what appears to be increasingly aggressive policy tightening by many central banks,” National Australia Bank’s Rodrigo Catril said.

“China’s zero Covid policy remains in place and the prospect of a protracted conflict between Russia and Ukraine does not bode well for energy prices and Europe’s energy supply in particular.”

And BlackRock’s Kate Moore told Bloomberg TV: “The uncertainty factor is one of the highest we’ve seen in recent years.

“There are so many cross-currents. And in this context, it is difficult to see volatility decreasing dramatically.

Markets are gearing up for next week’s big event, the Federal Reserve’s final policy meeting, where it is expected to raise interest rates by half a point and signal further big hikes throughout the month. year as it struggles to contain runaway inflation.

The prospect of higher borrowing costs pushed the dollar higher against its peers, hovering around a 20-year high against the yen as Japan maintains an ultra-loose monetary policy.

The greenback is also at a five-year high against the euro, with the European Central Bank also refusing to go along with the hawkish Fed, while the single currency is also weighed down by fears over the economy as Russia cuts. the energy supply of certain parts of the continent. .

Key figures at 02:30 GMT

Tokyo – Nikkei 225: UP 0.6% to 26,548.82 (pause)

Hong Kong – Hang Seng Index: UP 0.8% to 20,108.73

Shanghai – Composite: UP 0.6% to 2,976.73

North Sea Brent: 1.0% decline to $104.27 a barrel

West Texas Intermediate: UP 0.9% to $101.06 a barrel

Euro/dollar: DOWN to $1.0535 from $1.0556 on Wednesday evening

Pound/dollar: DOWN to $1.2533 vs. $1.2543

Euro/pound: DOWN to 84.06 pence vs. 84.14 pence

Dollar/yen: UP to 128.67 yen from 128.43 yen

New York – Dow: UP 0.2% to 33,301.93 (closing)

London – FTSE 100: UP 0.5% to 7,425.61 (closing)

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Garland K. Long