Asian Markets Turn Lower Amid Interest Rate Uncertainties and Rising Geopolitical Tensions

Akira Ito
02 Apr, 2024
Tokyo

Asian markets rebounded; the Nikkei index in Tokyo soared more than 1.5% but erased most of the gains; and market indexes in Shanghai struggled to gain traction. 

The Hang Seng index in Hong Kong advanced 2.4% after investors returned from a long weekend and reacted to an improving economic manufacturing activity report released over the weekend. 

However, market indexes in South Korea and Australia closed mixed amid interest rate uncertainties. 

 

Japan Indexes Erase Early Gains in Choppy Trading 

Stocks in Japan attempted to rebound in Tuesday's trading in cautious trading after the U.S. manufacturing survey showed stronger-than-expected activities in March. 

Moreover, investors also turned cautious a day after the release of data on business confidence among large manufacturing companies and the persistent weakness in factory activities for the tenth month in a row. 

In other economic news, the monetary base in Japan increased by 1.6% from a year ago in March to 666,240 trillion yen, the Bank of Japan said on Tuesday. 

The monetary base data for February was revised higher to 2.4% from the previous estimate of 2.1%, and the seasonally adjusted monetary base rose 3.6%.

The Nikkei 225 index rose 0.1% to 39,837.47, and the Topix index fell 0.2% to 2,714.93. 

Large manufacturing companies traded lower on the prospect of higher labor costs, but tech companies continued to extend this year's gains. 

Tokyo Electron, SoftBank, Screen Holdings, and Disco Corp. gained between 1% and 3%. 

Sumco Corp., Ebara Corp., and Rrenesas Electronics gained between 2% and 4%. 

Toyota Motor, Honda Motor, Nissan Motor, and Subaru declined between 1% and 4%. 

Nippon Steel advanced 2% to ¥3,689.0 as the company made its final push to acquire U.S. Steel for $14.1 billion. 

 

Hong Kong Stocks Rebound, Shanghai Stocks Struggle Near Flatline

Stocks in Shanghai lacked direction, but benchmark indexes in Hong Kong advanced after investors reacted positively to the rising factory activity data released over the weekend. 

China's manufacturing purchasing managers' index increased to 50.8 in March from 49.1 in February, the National Bureau of Statistics reported on Sunday. 

Moreover, investors hoped that foreign investors would continue to purchase Chinese stocks following the net inflows in February and March. 

The Hang Seng index declined nearly 3% in the first quarter and extended four-year losses on the protracted property market slump, weak consumer and investor confidence, and the government's prioritizing of national security over the economy, targeting foreign firms. 

The CSI 300 index decreased 0.5% to 3,576.11, but the Hang Seng index rose 2.2% to 16,912.34. 

Bank of China, China Merchant Bank, ICBC, and Agriculture Bank of China advanced between 1% and 4% in Hong Kong trading. 

Xiaomi Corp. soared 10.4% to HK$16.48 after the smart phone maker reported strong demand for its electric vehicle released last week. 

 

India Stocks Look Down, Rupee Holds Firm Near Record Low

Stocks lacked direction in Mumbai trading, and investors awaited interest rate decisions from the Reserve Bank of India on Friday. 

The Sensex and the Nifty indexes traded around the flatline as investors debated future rate paths and domestic macroeconomic conditions. 

The yield on 5-year Indian government bonds held stable, and the Indian rupee traded near record lows after the U.S. dollar edged higher against major international currencies. 

The Sensex index increased 0.04% to 74,044.45, and the Nifty index edged up 0.2% to 22,490.05. 

On the Mumbai stock exchange, 68 stocks traded at their 52-week highs and 12 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds held steady at 7.05%, and the Indian rupee held steady at ₹83.35 against the U.S. dollar.