China Holds Key Rates, Ocean Freight Rates Plunged to New One-year Low

Arjun Pandit
20 Feb, 2023
Mumbai

Asian stocks closed mixed and investors in Japan were on alert after North Korea tested another ballistic missile. 

North Korea fired two short-range missiles on Monday, the defense ministry confirmed Monday. 

Two missiles traveled between 350 kilometers and 400 kilometers and plunged to the Sea of Japan near the economic zone. 

Monday's launch followed the firing of the long-range missile on Saturday that reached waters near Hokkaido. 

Tensions were high after balloon spat between China and the U.S. escalated and showed no sign of easing. 

Moreover, Japanese diplomats also stepped up activities and notified Chinese counterparts that Japan will knock down aerial objects that violate its airspace.  

Prime Minister Fumio Kishida requested an emergency meeting of the United Nations Security Council and the meeting is expected to be held in New York on Tuesday at 8 p.m. Eastern Time.  

The yen traded in a tight range and stocks were on hold after geopolitical tensions were on the rise in the region.   

The Nikkei 225 Stock Average increased 18.18 points and the yen edged down to 134.04 against the U.S. dollar. 

 

China Left Key Lending Rates Unchanged

The central bank left its lending rate unchanged for the sixth month in a row. 

One-year loan prime lending rate, used for consumer and corporate lending, was left at 3.65% and five-year lending rate, reference rate for mortgages, was held at 4.3%. 

China lowered two key lending rates last August 2020 to revive the flagging economy before the ending of "zero-Covid" lockdowns. 

 

Container Shipping Rates Accelerate Decline

Shifting trade picture and falling global demand was visible as port activities at main exporting hubs in South China remained subdued. 

Yantian International Container Terminal has only 15% of the 15,000 truck drivers working and empty containers are stacked seven-level high, the highest since the launching of the port in 1993.    

The Freightos Baltic Index showed that the freight cost to ship a 40-foot container from Asia to the west coast of the United States weakened last week and dropped to $1,295, 92% lower than the level last year.   

The freight cost for shipping a 40-foot container from Asia to the east coast of the United States declined 86% last week from the level a year ago.   

 

China Stocks Soar After Rate Decision

Stocks in China surged after the People's Bank of China left its key lending rate unchanged. 

The Shanghai Composite Index soared 2.1% to 3,290.34 and the Hang Seng index added 0.8% to 20,886.96. 

 

India Stocks On Hold On Rising Geopolitical Tensions

Stocks in Mumbai advanced in the early trading but gave up gains in the afternoon after investors turned cautious on the rising tensions between China, Japan, North Korea and the U.S. 

Investors are also worried that the return of aggressive U.S. interest rate hikes may negatively impact the battered rupee and also weaken the goods exports from India. 

Cipla Ltd plunged 6.1% after the U.S. health regulator issued 8 observations following inspections between February 6 and 17. 

The company said it will work closely with the U.S. Food and Drug Administration and the drug maker said it is committed to addressing the recommendations in the stipulated time. 

The Sensex index declined 0.5% or 311.03 points to 60,691.54 and the Nifty index dropped 0.6% or 99.60 points to 17,844.60.  

The Indian rupee edged lower to 82.62 against the U.S. dollar.