Asian Stocks Rise Amid Chinese Stimulus Hopes: Markets Wrap – Yahoo Finance

(Bloomberg) – Stocks in Asia are set to reach their highest closing price in nearly four months, buoyed by a rally in Hong Kong stocks amid hopes of stimulus in China and a positive sign in geopolitics.

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An Asian equity measure gained as much as 0.4% while Hong Kong’s Hang Seng index rose about 1%, while the market’s technology measure rose about twice as fast.

Japanese stocks wiped out gains on sales in the electrical appliances sector, a rise in the yen and positioning ahead of stock futures contract expiration. India’s Nifty 50 Index moved closer to its all-time high, but for the Adani Group, the impact of US shortseller Hindenburg Research’s bombshell report on some of its stocks remained.

With traders looking for more government support to support China’s lukewarm economic recovery, stimulus optimism is rising after authorities asked the country’s largest banks to cut their deposit rates. Bloomberg Economics expects the People’s Bank of China to cut its one-year benchmark rate “as soon as possible in mid-June.”

Meanwhile, US Secretary of State Antony Blinken plans to visit China in the coming weeks, providing room for improvement in fraught relations between Washington and Beijing, which have weighed on stock prices in Hong Kong and Shanghai.

Given current valuations, it’s probably good to be slightly overweight in Chinese equities, according to Ayaz Ebrahim, portfolio manager of emerging markets and Asia-Pacific equities at JPMorgan Asset Management. Laura Wang, Morgan Stanley’s chief Chinese equity strategist, said she expected earnings growth of 9% this year, supported by the government’s measures.

Stocks in mainland China fluctuated after trade data showed exports fell more than expected in May. The offshore yuan changed little.

European stock futures held small gains and US stocks held steady on Wednesday. A rotation to financial stocks Tuesday suggested that the breadth of the S&P 500’s recent rally could soon extend beyond technology. Although a fall from Apple Inc. earnings fell, the benchmark still rose by 0.2%. The KBW Regional Bank index rose more than 5% and the Russell 2000 rose 2.7%.

In currency markets, the greenback’s strength was little changed as the yen appreciated and the Turkish lira fell 3% to a record low. Treasury yields were stable across all maturities after Tuesday’s announcement of a Treasury bill auction weighed on short-dated US bonds.

Small gains on Wall Street on Tuesday pushed the S&P 500 close to a bull market. The mood in global markets has been cautious with some doubts as to whether prices have risen too quickly on the artificial intelligence hype.

In terms of commodities, little changed in gold. Oil fell after giving up profits Tuesday following news of Saudi Arabia’s supply restriction. Wheat rose sharply after Ukraine said Russian troops blew up a giant dam in the south of the country.

The World Bank said in a report on Tuesday that the global economy is in a precarious situation as sharp rate hikes hit activity and fuel vulnerabilities in low-income countries. Those fears have suppressed stocks.

But with inflation rates still high in the US, traders increasingly expect the Federal Reserve to hold rates steady at its June meeting, while retaining the option of rate hikes later. Former Vice President Richard H. Clarida also said on Tuesday that it is unlikely that the U.S. central bank will begin cutting rates until 2024.

Main events this week:

• Chinese currency reserves, Wednesday

• US Commerce, Consumer Credit, Wednesday

• Canada tariff decision, Wednesday

• EIA crude oil inventory data, Wednesday

• Eurozone GDP, Thursday

• Review decisions in India, Peru, Thursday

• GDP of Japan, Thursday

• US wholesale inventories, first jobless claims, Thursday

• China PPI, CPI, Friday

Some of the major moves in markets:

Shares

• S&P 500 futures were little changed as of 6:46am London time. The S&P 500 rose 0.2%

• Nasdaq 100 futures were little changed. The Nasdaq 100 had changed little

• Japanese Topix fell 1.1%

• The Australian S&P/ASX 200 was little changed

• Hong Kong’s Hang Seng rose 1.1%

• The Shanghai Composite rose 0.2%

• Euro Stoxx 50 futures up 0.1%

Currencies

• The Bloomberg Dollar Spot Index had changed little

• The euro was little changed at $1.0687

• The Japanese yen rose 0.3% to 139.23 per dollar

• The offshore yuan changed little at 7.1276 to the dollar

• The Australian dollar rose 0.1% to $0.6681

• The British pound was little changed at $1.2421

Cryptocurrencies

• Bitcoin fell 0.1% to $26,914.5

• Ether rose 0.1% to $1,879.48

Bonds

• The yield on 10-year government bonds was little changed at 3.66%

• Japanese 10-year yields fell by one basis point to 0.410%

• Australian 10-year yields rose two basis points to 3.82%

Raw materials

This story was created with the help of Bloomberg Automation.

–With assistance from Joanna Ossinger.

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