China Policymakers Struggle with Growth Initiatives, Australian Economy Barely Expanded In December Quarter

Arjun Pandit
05 Mar, 2024
Mumbai

Stock markets in Asia moderately declined amid a lack of economic news, and investors focused on China's annual gathering of lawmakers. 

Elsewhere in the region, Australia's economy expanded 0.2% in the fourth quarter from the previous quarter, its ninth quarterly expansion in a row, the Australian Bureau of Statistics reported Wednesday. 

Australia's economy expanded at an annual pace of 1.5% in the fourth quarter, the slowest pace of growth in three years. 

For all of 2023, Australia clocked a 1.5% increase, largely driven by a rise in net exports, and consumer spending barely rose 0.1%. 

When counting the rising population in Australia, GDP per person actually shrank 1.0% in 2023. 

 

Japan Indexes Hold Steady Near Record Highs 

Stocks in Japan lacked direction following the weakness in New York in overnight trading. 

Tech stocks struggled for the second day in a row but traded near record highs as investors increased allocations to semiconductor-related companies that are likely to benefit from the boom in artificial intelligence applications. 

The Nikkei 225 Stock Average held steady at 40,098.24, and the Topix index gained 0.4% to 2,730.81. 

Tokyo Electron, Disco Corp., Screen Holdings, SoftBank, and Renesas Electronics decreased between 1% and 2%. 

Fast Retailing declined 0.7%, but Isetan Mitsukoshi advanced 2.9%. 

Among large banks, Mizuho Financial and Sumitomo Mitsui Financial advanced more than 1%, while Mitsubishi UFJ Financial added 0.5%.

 

China Stocks Struggle as Lawmakers Discuss Broader Issues

Stocks in Shanghai advanced in cautious trading as investors held out for more targeted financial and property market reforms. 

However, market indexes in Hong Kong rebounded on speculation that the latest property reforms in the city are enough to revive the moribund local property market and rising interest from mainland buyers. 

Investors are more focused on corporate earnings than the big-picture discussions by policymakers during the 7-day gathering of the rubber-stamp parliament and Chinese leaders.

Investors are generally disappointed with the lack of specific stimulus measures at the annual parliamentary meeting, arbitrary implementation at local levels, and rising debt levels at the central and local levels. 

Foreign investors are still lowering their allocation to Chinese stocks on the grounds of inconsistent economic reforms, a lack of earnings visibility, and expanded anti-espionage and anti-national security laws that could endanger intellectual property. 

Despite the gains in today's trading, the benchmark index in Hong Kong is the worst-performing market among the largest ten financial markets in the world. 

The CSI 300 index edged up a fraction to 3,568.20, and the Hang Seng index rebounded 2.3% to 16,539.01. 

Tech stocks advanced in Hong Kong ahead of JD.com's financial results in the hopes that the e-commerce company is set to announce earnings gains of at least 50% later today. 

Alibaba.com Group, Tencent, Meituan, and Baidu.com gained between 2% and 4%. 

Banks also participated in the rally, and HSBC and China Merchants Bank gained 2% and 4%, respectively. 

 

India Indexes Struggle to Advance Amid Valuation Worries and Higher Interest Rates

Stocks in Mumbai faced selling pressure, and valuation worries kept investors on the sidelines for the second week in a row. 

The Sensex and the Nifty indexes traded down amid moderate weakness in Asian markets and a lower closing in the U.S. for the second day in a row. 

Stocks in Mumbai are facing headwinds, and benchmark indexes are up about 2% in the year so far, lagging behind gains in Japan, the U.S., Germany, and France. 

Moreover, international rate jitters also compounded market anxieties ahead of the European Central Bank's rate decision on Thursday. 

The central bank is widely expected to hold its interest rates steady, but it may provide clues to future rate paths. 

International investors are struggling to increase their exposure to Indian stocks as higher interest rates in the U.S. and Europe provide tough comparisons, and earnings results in India have lagged market expectations. 

At the same time, stocks in India and Japan have benefited from foreign investors switching their investments from China following the protracted decline in the property market and the weaker-than-expected rebound in China's economy after the ending of zero COVID restrictions. 

The Sensex index decreased 0.2% to 73,551.08, and the Nifty index fell 0.3% to 22,294.60.

On the Mumbai stock exchange, 75 stocks traded at their 52-week highs and 34 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.05%, and the Indian rupee strengthened to ₹82.85 against the U.S. dollar.