Asian Markets Track New York Gains, Singapore Holds Rates and Lowers Growth Estimate

Arjun Pandit
14 Apr, 2023
Mumbai

Asian markets traded higher following overnight gains in the U.S. after inflation and rate-hike worries eased. 

On Thursday wholesale price index and on Wednesday consumer price index showed waning inflation pressures, reflecting volatile but falling energy prices.  

Wholesale price inflation index unexpectedly fell in March and consumer price index declined for the ninth month in a row.  

Asian markets track Wall Street swings as the region's export driven economies rely on the market developments in the world's largest economy. 

Investors are hoping that the two inflation reports this week may convince the Federal Reserve to pause future rate hikes after the next meeting in early May. 

 

Singapore Left Currency Band Unrevised 

The Monetary Authority  of Singapore left its key lending rate unrevised after five interest rate hikes in a row since October 2021. 

MAS maintains an indirect control on its interest rate by widening or tightening the currency band, known as Singapore dollar nominal effective exchange rate (S$Neer). 

MAS said it will retain its current rate of currency appreciation, which will help the nation pay for pricier imports but also keeping the current exchange rate in place will not impact its ability to export. 

After the MAS policy announcement, the Singapore dollar declined as much as 0.5% but managed to recover to $1.325. 

Singapore's economy expanded only 0.1% in the first quarter on an annual basis after rising at 2.1% in the final quarter of 2022, the Ministry of Trade and Industry said Friday. 

The ministry also lowered its estimate of annual economic growth in 2023 by 0.5 percentage point to 2.5%, from 3.6% in the previous year. 

The MAS also left its 2023 estimate of core inflation, which excludes housing and private transportation, between 3.5% and 4.5% and overall inflation between 5.5% and 6.5%.   

 

Indexes & Yields 

Stocks in Tokyo advanced following the gains in overnight trading in New York but markets in Shanghai and Hong Kong were muted. 

The Nikkei index increased 1.1% to 28,462.21, the Hang Seng Index added 0.2% to 20,391.29 and the SSE Composite index advanced 0.5% to 3,334.17. 

Financial markets in India were closed for Ambedkar Jayanti. 

 

Asia Stock Movers 

Stocks in Hong Kong lacked direction but funds controlled by mainland China added exposure to large tech companies. 

BYD, Geely Auto, HSBC and Alibaba Group added between 0.5% and 1.5% but Tencent Holdings fell 0.2%, JD.com declined 1.5% and Baidu fell 4.1%. 

Mainland China controlled funds increased their exposure to Hong Kong listed stocks for the tenth week in a row, adding $10 billion of stocks according to the data available from Stock Connect. 

Fast Retailing Company Limited soared 8.5% to ¥32,840.00 after the parent of Uniqlo reported operating profit in the first-half to February jumped to ¥220 billion from ¥189 billion a year ago. 

The retailer also lifted its full-year profit estimate to ¥360 billion from ¥350 billion forecast in January. 

Infosys Limited declined 8.2% to $15.69 in New York trading after the India-based global tech services provider reported weaker-than-expected quarterly results. 

Revenue in the March quarter increased 6.4% to $4.6 billion and net income declined to $744 million from $752 million and diluted earnings per share held at 18 cents. 

For the fiscal year 2023 ending in March, revenue increased 11.7% to $18.2 billion and net income was stable at $2.9 billion and diluted earnings per share was 71 cents compared to 70 cents a year ago. 

The company guided fiscal year 2024 revenue to rise between 4% and 7% in constant currency and operating margin between 20% and 22%.