Asian Stocks Sink As Fed Week Begins, China Reopens Strong
Most Asian stock markets sank on Monday as caution kicked in ahead of a Federal Reserve meeting and key economic data this week, while Chinese shares rose sharply as they resumed trade after a week-long holiday. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 1.2% and 0.7%, respectively, with markets betting that the country’s economy was further supported by its first Lunar New Year holiday without COVID restrictions in three years. State media reported that domestic travel and consumption had bounced back sharply in the past week. The Chinese government also reiterated over the weekend that it plans to shore up spending and drive local consumption. A recovery in the Chinese economy bodes well for broader Asian markets, given their reliance on the country as a trading partner. But given that the country is also coping with its worst yet COVID-19 outbreak, the timing of such a recovery remains uncertain. Markets are awaiting Chinese business activity data this week to gauge how much the economy benefited from the scaling back of anti-COVID measures. Broader Asian markets retreated as focus turns squarely to a Federal Reserve meeting this week. While the central bank is widely expected to raise interest rates by 25 basis points, its outlook on monetary policy will be closely watched, given that recent data painted a somewhat mixed picture of the world’s largest economy.
Technology Stocks Were The Worst Performers For The Day.
with Hong Kong’s Hang Seng index down 1.8% amid steep losses in majors such as Alibaba Group Holding Ltd (HK:9988) and Tencent Holdings Ltd (HK:0700). A slew of U.S. technology earnings are due this week, and are also expected to provide more cues for global tech stocks. But search engine Baidu Inc (HK:9888) bucked the trend, rising nearly 3% after reports said it plans to launch its own ChatGPT-style artificial intelligence. South Korea’s KOSPI fell 1.4%, while Japan’s Nikkei 225 index fell 0.1%. U.S. nonfarm payrolls data for January is also due later this week, with the labor market remaining a key point of focus for cues on the economy. Indian stocks sank for a third straight session, with the Nifty 50 and BSE Sensex 30 indexes hitting a three-month low as a rout in shares under the Adani Group showed little signs of easing. The conglomerate denied allegations of stock manipulation and fraud raised by a recent short seller report by Hindenburg Research. But stocks under the firm sank as much as 20%. Still, shares of Adani Enterprises Ltd (NS:ADEL), the conglomerate’s flagship firm, appeared to have stemmed recent losses, and were trading 2.5% higher in morning trade.