(Bloomberg) — A rally in Chinese shares intensified after policymakers took more steps to revive investor confidence, defying broader weakness in Asia following a tech-led retreat on Wall Street.
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A gauge of Hong Kong-listed Chinese firms jumped as much as 4%, less than 1% away from erasing all its year-to-date losses. The CSI 300 Index of mainland shares rose 2.2%. Property developers led the gains after banks ramped up funding help for the troubled sector. A fresh crackdown on trading by quant funds also reduced concerns about short selling.
That’s in contrast with losses in other Asian markets from Japan to South Korea and Australia, after the Nasdaq 100 fell almost 1% and the S&P 500 slid below 5,000 Tuesday. The focus is on chipmaker Nvidia Corp.’s earnings and the Federal Reserve’s latest policy meeting minutes due later Wednesday. Contracts for US equities slipped.
“AI hype has deflated a bit and there may be some rotation within north Asia to China, which is still seeing post holiday cheer from relatively better consumer spending data, while market stabilization measures are still ongoing,” said Marvin Chen, a Bloomberg Intelligence analyst.
Elsewhere, shares of HSBC Holdings Plc fell as much as 3.8% in Hong Kong after the bank reported an 80% plunge in its fourth-quarter profit. Aluminum surged on speculation that a fresh wave of US sanctions against Russia may target the metal, potentially disrupting supplies.
The dollar steadied and 10-year Treasury yields were little changed in Asian trading, while persistent bearishness around the outlook for China’s steel demand pushed iron ore to a three-month low.
In Japan, recent loss of momentum has pulled the Nikkei 225 further away from reaching its highest-ever close of 38,915.87 in 1989. Still, macro and stock hedge funds are betting on Japan this year, predicting the central bank will shift its policy after eight years of negative interest rates. The yen steadied around 150 per dollar as the nation’s exports rose more than expected in January.
Nvidia Nerves
The ongoing earnings season has so far reaffirmed the view that Corporate America is holding up well, although the reporting period has been mixed for the “Magnificent Seven” megacaps. Among other highlights from the US session, Walmart Inc. climbed after reporting strong earnings while Palo Alto Networks Inc. tumbled in late trading after cutting its revenue forecast for the year.
Ahead of Nvidia’s numbers, some traders decided to lock in profits — with the market also weighing a report that Microsoft Corp. is developing a networking card as an alternative to the one supplied by the chipmaker.
The artificial-intelligence frenzy has boosted stocks that have been linked to the technology, and Nvidia is one of the few firms to have demonstrated significant revenue growth from AI.
The Fed’s January meeting minutes are also due on Wednesday, offering traders more clues about where policymakers stand on a rate-cut timeline. Faster-than-expected inflation last week fueled concerns the Fed may not begin cutting interest rates as soon — or by as much — as market participants previously expected this year.
Both oil and gold edged higher.
Key Events This Week:
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Eurozone consumer confidence, Wednesday
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Nvidia earnings, Wednesday
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Federal Reserve releases minutes from its January meeting, Wednesday
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Atlanta Fed President Raphael Bostic speaks, Wednesday
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
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US initial jobless claims, US existing home sales, Thursday
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ECB issues account of January meeting, Thursday
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Fed Governor Lisa Cook and Minneapolis Fed President Neel Kashkari speak, Thursday
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China property prices, Friday
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Germany IFO business climate, GDP, Friday
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ECB publishes 1- and 3-Year inflation expectations survey, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.1% as of 2:16 p.m. Tokyo time
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Japan’s Topix fell 0.2%
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Australia’s S&P/ASX 200 fell 0.7%
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Hong Kong’s Hang Seng rose 2.8%
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The Shanghai Composite rose 2.2%
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Euro Stoxx 50 futures were unchanged
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Nasdaq 100 futures fell 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0814
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The Japanese yen was little changed at 150.02 per dollar
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The offshore yuan rose 0.2% to 7.1860 per dollar
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The Australian dollar rose 0.3% to $0.6566
Cryptocurrencies
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Bitcoin was little changed at $52,046.76
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Ether rose 0.5% to $3,004.71
Bonds
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The yield on 10-year Treasuries was little changed at 4.27%
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Japan’s 10-year yield was unchanged at 0.725%
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Australia’s 10-year yield was little changed at 4.18%
Commodities
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West Texas Intermediate crude rose 0.3% to $77.29 a barrel
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Spot gold rose 0.3% to $2,030.21 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
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