(ATF) Hong Kong: Asian markets meandered ahead of US CPI data as investors assessed the damage to their portfolios from a potential jump in inflation.
Reflecting those concerns, US 10-year Treasury yields jumped 3 basis points to 1.70%, the pressure also coming from supplies ahead.
Japan’s Nikkei 225 index added 0.72%, driven by glass product companies and department store operators after their robust earnings, Australia’s S&P ASX 200 ended flat, Hong Kong’s Hang Seng index edged up 0.15% but China’s CSI300 dipped 0.16%. Regionally, the MSCI Asia Pacific index advanced 0.34%.
Chinese markets underperformed after exports in dollar terms rose 30.6% in March from a year earlier, but at a slower pace from a record 154.9% growth in February. Analysts polled by Reuters have forecast a 35.5% jump in shipments.
Stimulus
“The impressive exports since Q2 2020 significantly reduced the need for larger stimulus measures in 2020 and has thus reduced the burden of deleveraging and alleviated the usual pain from exiting expansionary fiscal and monetary policies,” said Ting Lu, Nomura’s Chief China Economist who expects export growth to slow, although it would remain in positive territory in coming months despite the higher base.
“The expected slowdown in export growth and the falling trade surplus are some of the reasons why we expect no sharp shift in Beijing’s policy stance,” he said.
The yuan eased to as low as 6.5530 per dollar, pulling further away from its February highs of 6.40, the peak from its rally since May 2020 when it was trading at around 7.20 to a dollar. Analysts say it is not just the smaller trade surplus weighing on the currency.
“Mainland China is also about to enter equity dividend payment season in May. The listed mainland Chinese stocks in Hong Kong are expected to pay a total dividend of around $60 billion between May-August, with the majority being banks, SOE names and property developers,” said Ju Wang, HSBC’s Senior FX Strategist.
Gold slipped 0.94% to $1,727 per ounce as the strength of the US dollar weighed. It is expected the price will consolidate.
“The improving US macro backdrop lessens the need for gold and a greater demand for stocks from the investment community as stocks act as competition for gold amid this type of cheery environment,” said Stephen Innes, Chief Global Market Strategist at Axi.
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Asia Stocks
- Japan’s Nikkei 225 index added 0.72%
- Australia’s S&P ASX 200 ended flat
- Hong Kong’s Hang Seng index edged up 0.15%
- China’s CSI300 dipped 0.16%
- The MSCI Asia Pacific index advanced 0.34%
Stock of the day
Stocks of China’s internet giants underperformed the market after the State Administration for Market Regulation (SAMR) said it summoned 34 companies and ordered them to conduct self-inspections within one month, warning of “severe punishment” for any that still violated the rules. E-commerce platform JD.com fell as much as 4.5% and rival Meituan dropped as much as 8%.
