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Investing.com — Most Asian stocks fell on Tuesday as markets priced in an early U.S. interest rate cut and awaited signals from several regional central banks, but sovereign wealth funds signaled intention to make more purchases. The Chinese market rose in response to the news.
Asian markets were buoyed by weak guidance from Wall Street as strong economic data and hawkish comments from Federal Reserve Chair Jerome Powell strengthened confidence that central banks will keep interest rates high for an extended period. received.
Chinese market soars as sovereign wealth fund announces additional purchase of ETFs
But Chinese stocks were the major outliers on Tuesday, with the index and the index up 2% and 0.9%, respectively. Both companies have further recovered from their five-year and four-year lows hit last week.
The Hong Kong index rose 1.9% as mainland stocks rose.
Buying into Chinese stocks was fueled mainly by reports that central Huijin Investment, a government-backed fund, announced that it would continue buying more exchange-traded funds to support the domestic stock market.
Central Huizin’s reported announcement was accompanied by a statement from China’s securities regulator that it would continue to guide domestic funds into the market, signaling more government support for the battered and undervalued stock market.
But it remains to be seen whether Tuesday’s move will spur a sustained recovery in China’s markets, given that government-backed funds have consistently sought to stem the slide in domestic stocks.
The underlying cause of China’s stock market crash – concerns about slowing economic growth – continues to have an impact. His January, due to be released later this week, is expected to show little improvement, especially after a series of disappointing results in the Purchasing Managers’ Index for the month.
Australia and India interest rate decisions keep Asian markets on edge
The focus now was on interest rate decisions in Australia and India, scheduled for later today and Thursday respectively.
Australia fell 0.6% ahead of the Reserve Bank of Australia’s decision, but the central bank kept interest rates on hold and little change is expected in the short term. Still, as inflation eases and economic activity cools in recent months, some traders are looking for signals that rates may be cut.
Australian statistics for the fourth quarter showed continued pressure on consumer spending from high interest rates and inflation.
Indian index futures signaled a slightly weaker trend as domestic stocks struggled to take large profits from record highs. Little change in policy is expected at Thursday’s meeting, while the inflation outlook will be closely watched.
Asian markets generally fell on persistent concerns about rising long-term interest rates.
Japan’s index fell 0.7% after rising to a 34-year high in January, with some profit-taking.
South Korea fell 0.5% on a decline in tech stocks, but most Southeast Asian markets remained flat to low.
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