Chinese and Korean stocks weigh on seesaw Asian trading: Market Wrap

(Bloomberg) — Asian stock markets traded volatilely as investors assessed China’s latest economic developments and South Korea’s plans to boost corporate value.

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MSCI’s Asia-Pacific index was flat, erasing most of its gains as Hong Kong and mainland Chinese stocks fell. Concerns about China gained attention on Friday after Moody’s Investors Service had its credit ratings withdrawn for 11 Chinese companies. Moody’s Investors Service withdrew its rating in an unusual haste that highlights the fallout from record defaults.

Traders are now waiting to see if the government will come up with more stimulus after President Xi Jinping called for a boost to sales of traditional consumer products such as cars and home appliances on Friday. Weak local government borrowing also fueled hopes for more economic stimulus and led to speculation that Beijing could take on additional debt to regain the slack.

South Korean stocks pared losses after falling as much as 1.4% following authorities’ plans to encourage listed companies to improve management and corporate governance, but some investors felt details were lacking.

“The reason for the disappointment is the fact that there is no need for companies to take any action in the short term,” said Seol Yong-jin, an analyst at SK Securities. “Investors were expecting specific incentives to be announced today, and the government has now announced that details will be announced.” It will be revealed later this year. ”

Japanese stocks outperformed as both the Tokyo Stock Price Index and the Nikkei Stock Average rose, with the latter hitting a new all-time high. Japanese trading company stocks rose after Warren Buffett said in his annual shareholder letter that Japanese companies follow “much better” investor-friendly policies than their U.S. counterparts. .

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Contracts in U.S. stocks also fell, weighed down by profit-taking in large tech stocks after gains in the S&P 500 index stalled last weekend.

Elsewhere, the New Zealand dollar weakened against the currencies of all 10 countries in the group as traders weighed the outlook for the country’s monetary policy. The US dollar rose slightly. In Asia, US Treasuries continued to rise, while Australian 10-year bond yields fell by 9 basis points.

This week, investors will be bracing for the impact of heavy issuance of U.S. Treasuries and corporate bonds, as well as month-end positioning. There are also plenty of economic indicators to scrutinize, including Thursday’s so-called Core Personal Consumption Expenditure Price Index, the Federal Reserve’s preferred measure of inflation.

New York Fed President William Williams said in an interview published Friday that the economy is heading in the right direction and that a rate cut by the end of the year is likely appropriate. A number of Fed speakers this week are likely to echo William William’s comments that the central bank is not feeling pressure to start cutting rates anytime soon.

Bob Savage, Head of Market Strategy and Insights, said: “The week ahead may be more troubled than calm.March will see the world worry about persistently high inflation and doubt the wisdom of central bankers taking a wait-and-see approach.” “It begins with doubts and fears of a major conflict that could lead to further global trade disruption.” BNY Mellon writes in a note to customers:

In commodity markets, oil fell further following a weekly decline as traders awaited new clues about global demand and stocks since March. Gold fell slightly and iron ore fell to its lowest since October after falling nearly 9% last week as hopes for a recovery in Chinese steel demand after the Lunar New Year holiday faded.

This week’s main events:

• Japan CPI, Tuesday

• Bank of England Governor Andrew Bailey speaks on Tuesday

• US Conference Consumer Confidence Index, Durable Goods, Tuesday

• Reserve Bank of New Zealand interest rate decision Wednesday

• Eurozone economy, consumer confidence, Wednesday

• FTSE 100 Index Review, Wednesday

• US GDP, Wednesday

• Atlanta Fed President Rafael Bostic, Boston Fed President Susan Collins and New York Fed President John Williams speak Wednesday

• G20 finance ministers and central bank chiefs meet on Wednesday

• Australian retail sales Thursday

• Consumer price index for France, Germany and Spain, Thursday

• US PCE deflator Thursday

• Chicago Fed President Austan Goolsby, Atlanta Fed President Raphael Bostic and Cleveland Fed President Loretta Mester speak Thursday

• The changes to the MSCI index, including the removal of 66 Chinese companies from the MSCI China index, will take effect at the close of trading on Thursday.

• China official PMI, Caixin manufacturing PMI, Friday

• Eurozone CPI, Friday

• US ISM Manufacturing, University of Michigan Consumer Sentiment, Friday

• Deadline for U.S. House funding bill to avert government shutdown Friday

• Atlanta Fed President Rafael Bostic and San Francisco Fed President Mary Daly give speeches

The main movements in the market are:

stock

• S&P 500 futures were down 0.2% as of 12:58 p.m. Tokyo time.

• Nikkei 225 futures (OSE) rose 0.5%

• Japan’s TOPIX rose 0.8%

• Australia’s S&P/ASX 200 little changed

• Hong Kong’s Hang Seng fell 0.7%.

• The Shanghai Composite fell 0.6%.

• Euro Stoxx50 futures fell 0.2%

currency

• Bloomberg Dollar Spot Index little changed

• The euro was almost unchanged at $1.0818.

• The Japanese yen was almost unchanged at 150.48 to the dollar.

• The offshore yuan was little changed at 7.2059 yuan to the dollar.

• The Australian dollar fell 0.2% to US$0.6552.

cryptocurrency

• Bitcoin fell 0.4% to $51,552.72.

• Ether fell 0.1% to $3,105.93.

bond

• The 10-year Treasury yield fell 2 basis points to 4.23%.

• Japan’s 10-year bond yield fell 2 basis points to 0.695%.

• Australian 10-year bond yields fell nine basis points to 4.11%.

merchandise

• West Texas Intermediate crude oil fell 0.6% to $76.06 a barrel.

• Spot gold fell 0.1% to $2,032.47 an ounce.

This article was produced in partnership with Bloomberg Automation.

–With assistance from Matthew Burgess and Youkyung Lee.

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