Asia’s major stock indexes saw a mixed start to the week with investors bracing themselves for another round of central bank tightening, amid continuing worries over China’s economic recovery and a global slowdown in demand.
There’s an action-packed week of earnings and central bank meetings ahead that will likely see higher interest rates in Europe and the United States – but possibly the end of the monetary tightening cycle in both.
Japan’s Nikkei share average rose for the first time in three days, with automakers rallying amid a weaker yen, as investors pared bets for a hawkish policy tweak from the nation’s central bank this week.
Chip-related shares rebounded from a two-day drop, tracking moves in US peers. Steel companies also gained, after strong earnings from Tokyo Steel saw its stock surge by the daily limit.
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The Nikkei share average rose 1.23%, or 396.69 points, to close at 32,700.94, while the broader Topix was ahead 0.84%, or 18.98 points, to 2,281.18.
Japan’s currency tumbled as much as 2 yen to nearly 142 per dollar on Friday, after it was reported Bank of Japan policymakers are leaning towards keeping yield curve control settings unchanged at its July 27-28 policy meeting.
China stocks slipped as losses in consumer-related shares countered gains in computer stocks, while traders looked for policy signals from a Politburo meeting likely happening at the end of this week.
The Shanghai Composite Index edged back 0.11%, or 3.58 points, to 3,164.16, while the Shenzhen Composite Index on China’s second exchange retreated 0.37%, or 7.53 points, to 2,004.30.
Hong Kong shares fell, dragged by property and tech stocks. Shares in China’s property developer Country Garden and property service arm Country Garden Services Holdings tumbled, down 5.8% and 15.5% respectively, extending losses from the previous week on debt concerns.
Mainland property companies listed in Hong Kong slumped more than 5% while tech shares listed in Hong Kong also slipped. Alibaba was down 1.1%, after the company said on Sunday it had decided not to participate in a proposed repurchase of shares by affiliate Ant Group, but would maintain its shareholding in the company.
The Hang Seng Index dropped 2.13%, or 407.11 points, to close at 18,668.15.
Elsewhere across the region, in earlier trade, Seoul, Taipei, Bangkok, Jakarta and Wellington were all up but Sydney, Mumbai, Manila and Singapore retreated. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.3%.
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Global markets are fully priced for quarter-point hikes from the US Federal Reserve and European Central Bank, so the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about the future.
The odd man out will be the Bank of Japan which meets on Friday and is thought likely to keep its super-loose policy intact, but some Western banks are speculating on a tweak to its yield curve control stance.
Eurostoxx 50 futures eased 0.2%, while FTSE futures fell 0.1%. S&P 500 futures and Nasdaq futures were little changed ahead of a wave of earnings this week.
A who’s who of major companies are reporting including Alphabet, Meta, Intel, Microsoft, GE, AT&T, Boeing, Exxon Mobil, McDonald’s, Coca Cola, Ford and GM.
Yields on 10-year Treasuries were steady at 3.85%, still below the recent spike high of 4.094%.
The US dollar eased a touch to 141.41 yen, having jumped 1.3% on Friday following the report on the BOJ. The gains lifted the dollar across the board and left the euro at $1.1123 and off its recent top of $1.1276.
The rise in the dollar pulled gold back to $1,961 an ounce and away from last week’s peak of $1,987.
Oil prices ran into profit-taking early on Monday having climbed for four straight weeks amid tightening supplies. Brent fell 12 cents to $80.95 a barrel, while US crude lost 13 cents to $76.94.
Key figures
Tokyo – Nikkei 225 > UP 1.23% at 32,700.94 (close)
Hong Kong – Hang Seng Index < DOWN 2.13% at 18,668.15 (close)
Shanghai – Composite < DOWN 0.11% at 3,164.16 (close)
London – FTSE 100 > UP 0.05% at 7,667.24 (0934 GMT)
New York – Dow > UP 0.01% at 35,227.69 (Friday close)
- Reuters with additional editing by Sean O’Meara
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