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©Reuters.
Investing.com — Most Asian stocks rose after an early decline on Monday as traders maintained their view that the U.S. Federal Reserve will cut interest rates soon, while Japanese markets pared gains. It extended to a 34-year high.
However, expectations for more important economic indicators this week, such as China’s statistics, limited any significant rise. The Chinese government’s reaction to Taiwan’s presidential election also made traders nervous.
Japanese stocks posted the best performance among their peers for the fourth straight quarter, rising 1.1% to a 34-year high as traders remain heavily biased towards domestic stocks due to the ultra-dovish Bank of Japan outlook. .
Japan’s Consumer Price Index (CPI) data to be released later this week is expected to show a sustained decline in inflation, prompting a dovish stance from the Bank of Japan.
The index rose 0.5% after Democratic Progressive Party (DPP) candidate William Lai won the presidential election over the weekend, with the island’s resistance to unification with China largely preserving the status quo.
Mr. Lai, along with the Democratic Progressive Party, has repeatedly advocated for Taiwan’s independence, which has become a major point of anger for the Chinese government. The Chinese government continued to call for unification over the weekend, and attention will be focused on further actions by the Chinese government ahead of Lai’s official inauguration in May.
Chinese stocks held back by disappointment over interest rate cuts, 4th quarter GDP expected
China’s index and index rose 0.2% and 0.4%, respectively.
The Hong Kong index rose 0.1%, with gains limited by declines in heavily weighted tech stocks.search engine giant Baidu (NASDAQ:) (HK:) fell as much as 10% after the company’s artificial intelligence bot, Arnie, was reported to have ties to the Chinese military and could face U.S. sanctions.
The People’s Bank of China (People’s Bank of China) unexpectedly left medium-term lending rates unchanged on Monday as it struggles to balance promoting economic growth and preventing further depreciation of the yuan. The move foretells that the central bank’s major policies will remain unchanged in the second half of January.
Still, Chinese stocks received some support from the People’s Bank of China’s liquidity injection.
Monday’s move shows that the Chinese government has limited scope to further ease financial conditions to support growth, which could bode ill for the fragile post-COVID-19 economic recovery. There is sex.
This week’s focus will primarily be on the fourth quarter GDP statistics, which will be released on Wednesday. Growth is expected to exceed the government’s 5% target for 2023, but much of the increase is also expected to be from a lower base compared to the previous year.
Chinese stocks were the worst-performing Asian market in 2023, dropping between 10% and 20% as the post-COVID-19 economic recovery failed to materialize.
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Markets across Asia edged higher as traders continued to bet on an early cut in U.S. interest rates on mixed indicators of inflation. The inflation rate rose more than expected in December, but the inflation rate fell more than expected.
There were few trading cues on Monday, partly because the US market was on holiday.
Australia and South Korea each rose 0.1%.
Indian index futures showed a slight positive trend. India’s inflation rate is expected later on Monday after Friday’s data showed a smaller-than-expected rise in inflation.
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