Asian Markets Trade Higher, China Indexes Ease Ahead of Inflation Data

Li Chen
08 Apr, 2024
Hong Kong

Asian markets attempted to rebound in Monday's trading following better-than-expected U.S. economic data on Friday. 

For now, investors set aside the expectations of a U.S. rate cut as early as June and its likely impact on the world bond market. 

Benchmark indexes in Japan, India, South Korea, and Australia advanced. 

Gold miners in China and Australia traded higher after the bullion price soared to a new record high amid speculation about the U.S. rate path, elevated tensions in the Middle East, and persistent buying by the central banks, including the People's Bank of China. 

The People's Bank of China lifted its declared gold holding for the 17th month in a row, according to the official figures released on Sunday. 

The central bank increased its holding by 0.2% in March to 72.74 million troy ounces, the smallest monthly purchase since the latest buying spree began in November 2022. 

 

Nikkei 225 Rebounds Tracking Friday's Wall Street Gains 

Benchmark indexes in Japan advanced in Monday's trading and rebounded from a three-week low, tracking gains on Wall Street in Friday's trading. 

The U.S. economy added more-than-expected 303,000 jobs in March, higher than 270,000 jobs in February, and at the fastest pace in ten months. 

The Nikkei 225 Stock Average added 0.8% to 39,293.52, and the Topix index gained 0.7% to 2,723.59. 

The yen hovered near 151.64 against the U.S. dollar as traders speculated on the timing and amount of government intervention in the currency market. 

Tech and financial services stocks were among the leading gainers in Monday's trading. 

SoftBank, Tokyo Electron, Advantest, Screen Holdings, and Disco Corp. gained between 1.4% and 3.2%. 

Socionext jumped 6.1% to ¥4,896.0, and Fujitsu advanced 3.8% to ¥2,476.0. 

Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial gained around 1.5%. 

 

China Stocks Struggle Ahead of Inflation and Trade Data 

Benchmark indexes in Shanghai and Hong Kong struggled to hold morning gains as investors awaited the release of economic data later in the week. 

China is scheduled to release its overall inflation data on Thursday and its international trade data on Friday. 

In addition, this week, the People's Bank of China is also likely to provide information on money supply and new loan updates. 

Stocks opened higher but quickly lost ground as foreign investors stayed on the sidelines. 

U.S. Treasury Secretary Janet Yellen said talks with Chinese Premier Li Qiang were "extensive and productive" after the two met on Sunday. 

Electric vehicle makers advanced after China's Commerce Minister Wang Wentao refuted the allegation of overcapacity and added that vehicle makers are not reliant on government subsidies. 

Li Auto jumped 3.3% to HK$119.90, and BYD jumped 2.1% to HK$202.0. 

The CSI 300 index decreased 0.5% to 3,551.93 and the Hang Seng index declined 0.1% to 16,709.68. 

Zijin Mining Group advanced 1.7% to HK$17.06 after yellow metal's price soared to a record high of $2,339.35 an ounce in New York. 

 

India Indexes Advance Amid Elevated Geopolitical Tension 

Stocks in Mumbai opened higher after benchmark indexes extended the previous week's gains. 

Crude oil edged lower in international trading but hovered near a five-month high amid the prospect of a wider war between Israel and Iran. 

Israel withdrew its military from South Gaza and returned to negotiations with Hamas in Egypt amid rising international pressure. 

About two weeks ago, Israel bombed Iran's embassy in Syria and killed seven people, including three military advisors.

Military experts in the region worry that Iran will conduct a retaliatory strike targeting Israeli embassies. 

On Friday, the Reserve Bank of India held its repo rate at 6.5% and projected India's economy to expand at an annual pace of 7.0% in fiscal 2025. 

However, the central bank did not provide clear indications on rate paths and inflation, citing elevated macroeconomic headwinds and global market uncertainty. 

Moreover, investors worried about the spillover effects of the higher-for-longer U.S. interest rates after the latest data showed stronger-than-expected payroll growth and economic conditions. 

This week, investors are looking ahead to the release of industrial output in March and overall inflation data in February. 

On the earning front, Tata Consultancy Services is scheduled to release its March quarter earnings after the close of trading hours in Mumbai. 

The Sensex index increased 0.5% to 74,635.23, and the Nifty index edged higher by 0.3% to 22,621.95. 

On the Mumbai stock exchange, 151 stocks traded at their 52-week highs, and 4 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds inched higher to 7.12%, and the Indian rupee edged lower at ₹83.28 against the U.S. dollar.