Profit Booking Drives Nikkei Lower, Meituan Earnings Lifts China Indexes Higher

Arjun Pandit
25 Mar, 2024
Mumbai

Market indexes in Tokyo and Seoul edged lower but advanced in China and Sydney in Monday's trading. 

Financial markets in India were closed to celebrate the Holi festival. Several markets are scheduled to be closed in Europe and Asia this Friday for a holiday. 

Stocks lacked direction after major central bank announcements dominated trading in the previous week. 

The central bank in Switzerland lowered its policy rate, trumping other major central banks around the world, and the Bank of Japan ended its negative rate regime after eight years and lifted its policy rate for the first time in 17 years. 

Investors are hoping that Chinese authorities will provide additional measures to stabilize markets, after the annual gathering of lawmakers failed to offer any new measures to support the slumping property market. 

 

Profit Taking Drives Japan Indexes Lower

Benchmark indexes in Tokyo traded down in Monday's trading, and investors booked profits in leading financial and tech stocks after a surge of 6% in the previous week. 

Market sentiment turned cautious ahead of the release of key economic data later in the week. 

Investors are awaiting the release of retail sales, industrial production, the unemployment rate, and the minutes of the BOJ’s last policy meeting. 

The Nikkei 225 Stock Average dropped 0.6% to 40,634.01, and the Topix index dropped 0.8% to 2,790.49. 

SoftBank, Tokyo Electron, Screen Holdings, and Advantest are between 1% and 2.5%. 

Banks and financial services providers were also among the leading decliners. 

Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui declined between 0.6% and 1.5%. 

 

China Stocks Trade Higher Ahead of Earnings Release; Meituan Soars 8% 

Benchmark indexes in Shanghai and Hong Kong advanced as investors awaited earnings announcements from leading Chinese companies later in the week. 

Investors also reviewed Premier Li Qiang's comments delivered at the China Development Forum over the weekend, which brought together Chinese officials, academics, and foreign business leaders. 

Premier Qiang said that China is working to improve market access, data transparency, and cross-border data flows for foreign businesses.

Foreign investors have been leaving China as Chinese officials ramp up their investigation of foreign businesses under the expanded espionage laws, and the second-largest economy has placed severe restrictions on capital repatriations, essentially banning capital outflow. 

Trading was driven by institutional investors adjusting their portfolio holdings in anticipation of earnings releases.

The CSI 300 index gained 0.4% to 3,558.59, and the Hang Seng index added 0.5% to 16,578.99. 

Market jitters kept tech stocks under check, and Lenovo Group declined 7% to HK$9.05, Alibaba Group dropped 1.3% to HK$70.10, and Baidu Group jumped 6% to HK$104.50. 

After Friday's close, Meituan and China Honqgiao Group reported sharply higher earnings. 

China Hongqiao Group soared 14% to $8.42 after the aluminum maker reported a 32% rise in annual earnings in 2023 from a year ago. 

Meituan rebounded 8% to HK$95.90 after the food delivery platform swung to net income in the fourth quarter. 

Revenue in the fourth quarter increased by 22.6% to 73.6 billion yuan, or $10.2 billion, and net income swung to a profit of 2.22 billion yuan compared to a loss of 1.08 billion yuan. 

The company's core local commerce revenue increased by 26.8% to 55.1 billion yuan. 

For the full year, revenue increased 25.8% to 276.6 billion yuan, and net income swung to 13.8 billion yuan from a loss of 6.7 billion yuan. 

The number of on-demand transactions on its delivery platform rose 25% to 6.0 billion yuan in the quarter and jumped 23.9% to 21.9 billion in the year from a year ago, respectively. 

 

 

India Markets Closed to Celebrate Holi 

Financial markets in India were closed to celebrate the Holi festival and the arrival of spring. 

In Friday's trading, benchmark indexes closed higher after shaking off morning volatility amid sustained buying in beaten-down small and mid-cap stocks. 

Market sentiment remained cautious in the final hour of trading, and the Sensex and the Nifty indexes extended weekly gains of 0.3%.

The Sensex index increased 0.2% to 72,831.94, and the Nifty index edged up 0.4% to 22,096.75. 

The yield on the 10-year Indian government bonds increased to 7.08%, and the Indian rupee edged lower to ₹83.58 against the U.S. dollar.