Nikkei Jumps to a 34-year High; China Stocks Struggle Near Lows

Arjun Pandit
11 Jan, 2024
Mumbai

Asian markets traded higher following the rise in New York overnight trading.

The Nikkei 225 average jumped nearly 1.9% to 35,091.50 and traded at a 34-year high for the second day in a row after the yen eased near 145 against the U.S. dollar.

In a broad rally, Japanese stocks advanced on the hopes that the Bank of Japan would continue its massive stimulus program and retain its ultra-loose policy, making domestic assets cheaper for foreign investors.

The KOSPI index edged up 0.1% to 35,091.50 after the Bank of Korea left its key lending rate unrevised at 3.5%, matching market expectations.

The central bank held its reference rate steady for the eighth time in a row amid record household debt, rising financial stress among real estate developers, and falling inflation.

Stocks in China advanced in a technical rebound after fund managers searched for bargains amid cheap valuations, weak investor interest, and the exodus of foreign investors.

Tech stocks led the gainers in Hong Kong, and financial stocks were among the leading gainers in Shanghai trading.

The Hang Seng index jumped 1.5% to 16,339.83, and the CSI 300 index added 0.3% to 3,286.77, amid improving sentiment in Chinese stocks.

The Hong Kong index halted a seven-day slide, supported by buying from fund managers based in mainland China, but the broader index on the mainland continued to drift lower.

Both indexes are down 4% since the start of the new year and extended 4-year losses to above 40%.

China is scheduled to release its inflation and international trade data on Friday.

 

India Stocks Advance Ahead of Inflation and Industrial Output Reports

Stocks in Mumbai traded higher, and investors awaited the release of earnings from tech services exporters and economic updates on inflation and industrial output.

Benchmark indexes advanced 0.4% amid a positive global market backdrop after mega-cap stocks led another day of advance in overnight trading in New York.

Crude oil prices in international trade edged down after the U.S. government agency showed an increase in crude oil inventories at the end of last week by 1.38 million barrels.

Over the last three weeks, crude oil prices have been volatile, with a downward bias.

Traders are confronting two diverging forces impacting the energy market.

Houthi rebel attacks on merchant ships in the Red Sea are raising the prospect of a wider war in the Middle East and driving prices higher.

But crude oil prices are kept in check by the growing international supply of crude oil from the U.S. and weaker demand growth in China.