Japan's Core Inflation Eases at a Slower Pace, Hong Kong Awaits Annual Budget

Arjun Pandit
27 Feb, 2024
Mumbai

Financial markets in Asia reacted to local news, and inflation in Japan dropped after food prices rose at the slowest pace in more than 15 months. 

Crude oil edged higher in international trading due to rising tensions in the Middle East and a lack of additional tankers to cover longer routes, as merchants have no plans to use Red Sea shipping lanes in the near future. 

 

Japan's Inflation Drops to a 22-month Low

Stocks in Tokyo edged lower, and the annual inflation rate in Japan edged lower in January. 

The Nikkei 225 Average decreased 0.2% to 39,163.85, and the Topix index gained 0.1% to 2,676.96. 

Retail inflation decreased to 2.2% in January from 2.4% in December, the Ministry of Internal Affairs and Communications reported Tuesday. 

Core inflation, which excludes fresh food but includes energy, fell to 2.0% from 2.3% in December and fell to within the target rate set by the Bank of Japan after staying above for 21 months in a row. 

Tech stocks and large-cap companies were among the leading gainers in Tuesday's trading. 

Tokyo Electron, Screen Holdings, SoftBank Group, Nippon Steel, and Mitsubishi UFJ gained between 0.5% and 4%. 

 

China Stocks Extend Losses, Hong Kong Awaits Annual Budget 

China stocks extended losses to the third day as government intervention faded and investors focused on weak economic fundamentals and the ongoing property market malaise. 

The CSI 300 index increased 0.9% to 3,483.13, and the Hang Seng index edged up 0.6% to 16,645.29. 

Benchmark indexes in Hong Kong extended losses to the third day after advancing 0.7% in the previous two sessions. 

Hong Kong stocks were also under pressure ahead of the release of the city's budget on Wednesday, and investors are looking for incentives for property transactions, tourism, and capital inflow. 

Property developers were among the leading decliners, and Sun Hung Kai, China Resources Land, China Vanke, Longfor Group, and Hang Lung Properties fell between 0.8% and 4%. 

Tech stocks traded sideways, and Baidu, Meituan, Alibaba Group, JD.com, and Tencent declined between 2% and 4%. 

 

Valuation Worries Keep India Indexes Under Pressure 

Stocks in Mumbai struggled to get traction as investors debated the future rate path, economic growth drivers, and earnings results. 

The Sensex and the Nifty indexes traded down but hovered near record highs after indexes extended gains in the previous weeks. 

Both the Sensex and Nifty indexes have advanced for five consecutive weeks, driven by steady fund flows from domestic and international investors. 

However, market participants are increasingly worried about stock valuations ahead of election jitters, and banks have faced selling pressure. 

Moreover, investors have avoided tech service exporters because of uncertainties related to the impact of artificial intelligence on future growth rates, and higher interest rates have dampened the present value of future earnings. 

The Sensex index decreased 66.60 points to 72,723.53, and the Nifty index fell 31.85 points to 22,090.20. 

On the Mumbai stock exchange, 187 stocks traded at their 52-week highs and 11 stocks traded at their 52-week lows.