China Stocks Ride Higher On Stimulus Hopes, Tesla Suppliers and EV Makers Turn Lower In Asia

Arjun Pandit
25 Jan, 2024
Mumbai

Asian markets generally advanced in Thursday's trading on the hopes that the People's Bank of China and Chinese government will soon announce more concrete policy measures to support financial markets.

In overnight trading, market indexes on Wall Street closed higher after a tech rally supported the rise of the S&P 500 index and the Nasdaq 100 index to record levels.

Electric vehicle components and electric display makers in Tokyo, Shanghai, and Seoul declined after Tesla reported weaker-than-expected earnings in the fourth quarter.

Moreover, Tesla guided a "notable decline in sales volume" in 2024 on global macroeconomic headwinds and rising competition from low-priced Chinese electric vehicle makers.

European markets also advanced following the rise in U.S. stocks, and tech stocks soared by as much as 5%.

Crude oil prices traded higher amid ongoing tensions in the Middle East and Red Sea, and merchant ships continued to avoid transporting through troubled waters.

 

Nikkei Struggled to Get Traction on BoJ Policy Shift Worries

The Nikkei 225 advanced 0.2% to 36,290.62 after falling as much as 0.2% in the morning session.

The Nikkei has been volatile over the last two days, hovering near a 34-year high on the basis of growing worries that the Bank of Japan is likely to end its ultra-loose monetary policy sooner than expected.

The Japanese yen edged higher near 147 against the U.S. dollar, and investors are awaiting the release of Tokyo inflation data on Friday.

Electric vehicle components and suppliers declined after Tesla reported weaker-than-expected earnings in the fourth quarter and guided a sharp decline in unit sales volume in 2024.

Nidec Corp. declined 3.7%, Disco Corp. jumped 1.7%, and Panasonic Holdings dropped 2.2%.

 

South Korea's 2023 GDP Growth Slowed

South Korea's gross domestic product growth was unchanged from the previous quarter, after government spending accelerated but consumer spending growth remained muted.

The gross domestic product in the fourth quarter increased by 0.6% from the previous quarter, matching the rate in the third and second quarters, the Bank of Korea reported Thursday.

On an annual basis, the economy expanded at a faster pace of 2.2% from the 1.4% rate increase in the previous quarter.

Government spending accelerated to 0.4% from 0.2% in the previous quarter, and consumer spending edged up 0.2% from unchanged.

Export growth slowed to 2.6% from 3.4% in the previous quarter, and import growth eased to 1% from 2.3%, respectively.

For all of 2023, the economy expanded by 1.4%, and economic growth slowed for the second year in a row, after expanding at 2.2% in 2022 and 4.3% in 2021.

In stock trading, the KOSPI index decreased 0.07% to 2,468.0 and extended this year's loss to 7.5%.

 

China Indexes Extended Rally to Third Day

China stocks rebounded for the third day in a row after investors put more faith in the recently announced stimulus measures.

The CSI index advanced 1.8% to 3,334.94, and the Hang Seng index soared 1.9% to 16,193.49 and extended the 3-day gain to over 5%.

The People's Bank of China lowered its bank reserve requirement for the first time in four months, injecting as much as $140 billion of liquidity into its financial system.

Moreover, the central bank also permitted banks to accept commercial real estate as collateral to seek funding to repay existing debts.

The move was widely welcomed by investors, but the measures are likely to fall short of reviving consumer confidence and market sentiment in the long term.

Alibaba Group advanced 0.8%, Tencent jumped 2.8%, Baidu advanced 3.2%, China Resources Land added 1.4%, and Longfor Group advanced 4.8%.

Li Auto, Xpeng, and Nio declined between 1.5% and 4.9% after Tesla earnings were below market expectations and the electric vehicle maker guided a decline in sales volume in 2024.

 

India Indexes Faced Headwinds After Mixed Quarterly Results

Stocks in Mumbai edged lower, and investors reviewed a flood of corporate earnings results.

The Nifty and the Sensex indexes traded down, and banks were in focus after Canara Bank, Bank of Baroda, and Indian Bank reported strong quarterly results.

Tech Mahindra dropped following the decline in revenue and profit, and Bajaj Auto faced headwinds from the persistent weakness in export sales growth.

The Sensex index decreased 287.67 points to 70,772.64, and the Nifty index fell 63.20 points to 21,390.75.

On the Mumbai stock exchange, 156 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee edged lower to ₹83.13 against the U.S. dollar.