Australia Paused Rate Hikes, More Interventions to Support Hong Kong Dollar

Arjun Pandit
04 Apr, 2023
Mumbai

Asian markets closed with moderate gains after investors assessed the impact of recent production cuts announced by the OPEC+ member nations. 

The voluntary cuts are in addition to the earlier cuts announced by the alliance in last October, reflecting the oil producing nations target price for oil to stay above $90 a barrel. 

In Japan, investors are also awaiting policy direction from Kazuo Ueda, the newly appointed governor of the Bank of Japan. 

Governor Ueda is scheduled to chair his first meeting of the central bank on April 27 and April 28 amid rising speculation that the ultra loose monetary policy may come to an end.     

The Nikkei 225 index increased 02% to 28,287.42, the Hang Seng Index closed down 0.5% to 20,294.10 and the Shanghai Composite Index added 0.35% to 3,308.05. 

The yield on Japanese government bonds closed at 0.39% and the Chinese government bonds at 2.86%. 

Automakers led the gainers in Tokyo trading. 

Honda Motor Company gained 1.1%, Toyota Motor Corp added 0.5% and Nissan Motor Co Ltd added 0.3%. 

SoftBank Group Corp increased 0.5% to ¥5,244.0 after tech stocks edged higher and overlooked the oil price surge in the previous session. 

Advantest Corp declined 1.9% to ¥11,420.0 and Fanuc Corp dropped 1.1% to ¥4,737.0. 

Market indexes in Hong Kong closed lower in light trading ahead of public holiday in the city and mainland China. 

Alibaba Group Holding Ltd declined 2.8% but CNOOC Ltd advanced 2.8% following the rise in international price of crude oil. 

Capital flight from Hong Kong also weighed on the market sentiment and the Hong Kong Monetary Authority purchased HK$7.1 billion or US$905 million of the local currency to defend its peg to the U.S. dollar.  

The HKMA has intervened in the currency market for the third time this year. 

Markets in India were closed for a public holiday and the Reserve Bank of India is scheduled to announce its interest rate decision tomorrow. 

Investors are anticipating the central bank to hike interest rates by 25 basis points and extend the cumulative 250 basis points increase in a year.  

The ASX 200 index gained 0.2% to 7,236.0 and the Reserve Bank of Australia held its rate at 3.6% after a policy meeting on Tuesday. 

The central bank left its rate unrevised  after raising rates by 350 basis points since May 2022. 

The policymakers' committee decided to wait for some time to judge the effect of several rate hikes on the economy. 

The board noted that monetary policy operates with a lag and the full impact of these cumulative rates are still to be felt by the broader economy. 

Commonwealth Bank, Westpac, ANZ Group Holdings and National Australia Bank rose between 0.1% and 0.3%.