(Bloomberg) — Stocks in Asia advanced after China rolled out its latest move to support the country’s slumping equity market.
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Shares edged higher in Hong Kong while Japanese equities also rose, led by energy producers, following gains in oil. Contracts for US stocks were mostly steady as investors weighed risks from the Middle East conflicts at the start of a crucial week for the global policy outlook.
China’s securities regulator announced Sunday that it will halt the lending of certain shares for short selling from Monday. The authorities are introducing measures following an alarming slide in the nation’s stocks — the MSCI China Index has lost around 60% from a February 2021 peak.
“The very poor sentiment leading to this could potentially open the door for some technical rebound,” Homin Lee, senior macro strategist at Lombard Odier, said on the measure in Chinese stocks on Bloomberg Television. “But in terms of the ability of these measures to really change the market sentiment, we’re slightly more cautious because what’s really needed is a change in the inflation outlook for the country and the overall sentiment in the private sector.”
China Evergrande Group is back in Hong Kong court as it will once again try to fend off liquidation. The distressed developer has made little progress toward clinching a restructuring agreement with creditors. Elsewhere, shares in other property developers rose after the southern metropolis of Guangzhou further eased home-buying restrictions.
Both Brent and West Texas Intermediate crude pared their advance after rising more than 1% to their highest since November in intraday trading. The US said Iranian-backed militants killed three service members, with US President Joe Biden pledging to retaliate. Oil had also climbed on Friday after Houthi rebels attacked a vessel carrying Russian fuel.
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The dollar edged higher and Treasuries steadied in Asian trading after retreating in the US on Friday. Mixed economic data spurred concerns the Federal Reserve will signal patience about the pace of interest-rate cuts when it meets on Wednesday.
This week also brings a slew of key data, from European GDP on Tuesday, to China PMI and Australian inflation on Wednesday, then European inflation and a Bank of England policy decision on Thursday.
“We think the Fed is likely to reiterate its data-dependent stance and caution that it is willing to exercise patience,” analysts at ANZ Bank Ltd., including Miles Workman, wrote in a report. “The Fed will be cautious about any reacceleration of inflation pressures from above-trend growth and the resilient labor market.”
Earlier Singapore’s central bank kept its monetary policy settings unchanged for a third straight time as price pressures persist and the economy shows signs of resilience.
Key events this week:
Australia retail sales, Tuesday
Eurozone economic confidence, GDP, consumer confidence, Tuesday
European Central Bank board members Boris Vujcic and Philip Lane speak, Tuesday
US Conf. Board consumer confidence, Tuesday
Microsoft Corp., Alphabet Inc. to report earnings, Tuesday
Australia CPI, Wednesday
Japan industrial production, retail sales, Wednesday
China non-manufacturing PMI, manufacturing PMI, Wednesday
France CPI, Wednesday
Germany CPI, unemployment, Wednesday
European Central Bank chief economist Philip Lane speaks, Wednesday
Federal Reserve’s rate decision, US employment cost index, Wednesday
Boeing Co. announces earnings, Wednesday
US Treasury quarterly refunding, in which officials to announce plans for auctions of 3-year notes, 10-year notes and 30-year bonds and other borrowing plans, Wednesday
Japan PMI, Thursday
China Caixin manufacturing PMI, Thursday
Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Thursday
Bank of England’s rate decision, Thursday
European Central Bank Governing Council member Mario Centeno speaks, Thursday
US ISM Manufacturing, initial jobless claims, Thursday
Apple Inc., Amazon.com Inc., Meta Platforms Inc. to report earnings, Thursday
German lawmakers hold final votes on revised 2024 federal budget, Friday
European Central Bank Governing Council Member Mario Centeno speaks, Friday
US employment report, University of Michigan consumer sentiment, factory orders, Friday
Stocks
S&P 500 futures fell 0.1% as of 10:45 a.m. Tokyo time. The S&P 500 was little changed on Friday
Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.5%
Japan’s Topix rose 1.2%
Australia’s S&P/ASX 200 rose 0.3%
Hong Kong’s Hang Seng rose 1.5%
The Shanghai Composite fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0846
The Japanese yen was little changed at 148.09 per dollar
The offshore yuan was little changed at 7.1877 per dollar
The Australian dollar rose 0.3% to $0.6593
Cryptocurrencies
Bitcoin rose 0.6% to $42,205.38
Ether rose 0.2% to $2,268.45
Bonds
The yield on 10-year Treasuries was little changed at 4.13%
Japan’s 10-year yield was unchanged at 0.710%
Australia’s 10-year yield declined two basis points to 4.22%
Commodities
West Texas Intermediate crude rose 0.6% to $78.51 a barrel
Spot gold rose 0.2% to $2,023.38 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Garfield Reynolds.
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