Bank of Japan Holds Rates, China Stocks Rebound After Talks of Support Measures

Arjun Pandit
23 Jan, 2024
Mumbai

Market indexes rebounded in China, accelerated in Japan, and struggled to advance in India in Tuesday's trading. 

In overnight trading in New York, the tech-powered rally extended to the second week after investors bid up semiconductor and mega-cap tech stocks. 

Crude oil was also in focus after the U.S. and U.K. carried out additional military strikes targeting Houthi rebel bases in Yemen.

The attacks on Monday, supported by Australia, Bahrain, Canada, and the Netherlands, targeted eight sites used for arms and supply storage and missile surveillance capabilities.

 

Japan Holds Interest Rates

Market indexes in Tokyo advanced after the Bank of Japan held its benchmark interest rate as expected.

The Nikkei 225 Average jumped 1.2% to a new 34-year high of 36,981.80 and extended gains for the third consecutive session.

The Bank of Japan held its short-term lending rate to -0.1% and the yield around zero for 10-year Japanese government bonds by a unanimous vote.

Market enthusiasm was supported by a higher closing in New York in overnight trading, and tech stocks extended their rally in the second week.

 

China Stocks Rebound On Stimulus Hopes 

The Hang Seng index soared 2.5% to 15,333.01, and tech stocks led the gainers after the indexes rebounded from a near-15-month low.

Chinese policymakers have struggled to provide meaningful support to financial markets after years of reckless spending on infrastructure driven by a surge in government debt.

By some measures, the Chinese government debt-to-GDP ratio is nearing 300%, the highest among large economies in the world.

Pessimism in Chinese markets is not likely to reverse in the near term as Chinese consumers retrench from spending, avoid pumping additional savings into the property market, and increase cash savings in the face of economic and labor market uncertainties.

 

Earnings Growth Expectations Power India Indexes  

Stocks in Mumbai advanced in early trading on Tuesday, and the Nifty and Sensex indexes traded sideways after investors returned from the Monday holiday.

Travel stocks were in focus after Ram Mandir Pran Pratistha of Ram Temple in Ayodhya.

The religious site is expected to attract as many as 10 crore, or 100 million, travelers to the city in Uttar Pradesh this year.

The Sensex index increased 584.75 points to 72,008.40, and the Nifty index rose 166.55 points to 21,738.35.

On the Mumbai stock exchange, 297 stocks traded at their 52-week highs and 10 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.18%, and the Indian rupee edged lower to ₹83.11 against the U.S. dollar.

In other markets in the region, the KOSPI index in Seoul added 0.4% to 2,473.54, and the ASX200 index in Sydney advanced 0.5% to 7,517.30.