Asia-Pacific Shares: Steady-to-Better is Early Call as Investors Digest Fed Minutes

Asia-Pacific shares are expected to rise slightly on the opening on Thursday, reflecting the price action in the U.S. market.

On Wall Street, the S&P 500 and the Dow closed modestly higher and Treasury yields reversed slightly losses after the Federal Reserve, in minutes of its latest meeting, said that the economic recovery remains far from complete despite showing signs of progress. The tech-weighted NASDAQ ended the session nominally lower, and economically sensitive small caps and transports dipped into the close.

European stocks inched lower, closing below record highs, while optimism over speedy inoculations and the soft British Pound powered the UK’s exporter-laden FTSE’s 0.9% advance.

Ahead of the Asia-Pacific opening, investors are digesting the Fed minutes, released at 18:00 GMT. The minutes from the Fed’s most recent monetary policy meeting, in which the participants expressed caution about ongoing risks of the pandemic and reiterated the Fed’s commitment to an accommodative stance until the rebound was more secure.

Wednesday Recap

The major Asia-Pacific markets traded mostly higher on Wednesday but shares on the Chinese mainland and in Hong Kong lost ground.

China Shares Dip as Distillers Lead Consumer Slump

China’s main equity gauges fell on Wednesday with consumer firms dragging the market lower, as investors continued to worry that strong economic data could lead to possible policy tightening.

Analysts say that strong economic data could prompt authorities to tighten policy, putting pressure on equity valuations. “We can’t rule out the possibility that policymakers may move as early as late this year to tighten monetary policy, potential triggering knock-on effects in both the real economy and financial markets,” Christina Zhu, economist at Moody’s Analytics said in a note.

Hong Kong’s Hang Seng Falls as Tech Firms Dip

Hong Kong’s Hang Seng Index fell on Wednesday in its first trading session after an extended holiday as tech heavyweights and financials dragged it lower.

Index heavyweight Tencent dropped 3.75% and was the biggest drag on the Hang Seng for the day. It fall pushed the TECH Index down 1.37% and the IT sector down 2.4%.

Shares of Lenovo Group also dragged on the TECH Index, falling 4.07% for a third consecutive session of declines after the PC maker settled a multi-year patent fight with Finland’s Nokia.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Called Mixed, Mirroring Wall Street’s Performance

The major Asia-Pacific stock indexes are expected to open Tuesday’s session mixed due to the volatile, choppy trade on Wall Street. Stocks in the Asia-Pacific posed a similar move at the start of the week. The turmoil in the markets is coming from the financial services sector in reaction to sales of holdings by Archegos Capital Management.

Overnight shares of Japanese financial services company Nomura plunged 16.33% after the firm flagged a potential $2 billion loss at a U.S. subsidiary.

“Nomura is currently evaluating the extent of the possible loss and the impact it could have on its consolidated financial results,’ the company said in a news release. The firm on Monday also canceled a bond issuance that had been priced earlier in March.

Credit Suisse shares tumbled 13% as the bank warned it would face a “significant” hit to its first-quarter results due to the bank having to exit hedge fund positions related to the forced selling.

Bank stocks weighed on the Dow industrials, with Morgan Stanley dropping 2.6% JPMorgan Chase off 1.6%.

Though the market was taking a hit from the Archegos stumble, the situation is unlikely to have lasting impacts on the broader market, according to Bespoke Investment Group.

“While other funds may be caught in the mess, we fail to see how this specific car crash of a trade ends up propagating across the financial system via counterparty default,” Bespoke said in its morning note. However, the firm did caution that investors should “get used to the GMEs and Archegos of the world, because they seem to be happening with more frequency even if their fall-out is contained.

Alibaba-backed Bilibili Slumps in Hong Kong Trading Debut

Bilibili Inc, which is backed by Alibaba Group, tumbled as much as 6.8% in its Hong Kong stock debut on Monday as analysts said a U.S. regulatory crackdown on listed foreign firms hit enthusiasm for the Chinese online video site.

It was the worst start in the city in six months by a major stock listing. Bilibili debuted down 2.2%, was sold off to as low as HK$753 and headed into the afternoon trading session down 2.7%. It raised HK$20.2 billion ($2.6 billion) after pricing shares at HK$808 each last week, Reuters reported.

The debut is the worst by a major deal in Hong Kong since Yum China Holdings Inc shares lost 6.3% at the open in September after it raised $2 billion, according to Refinitiv data.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Post Sharp Gains; Hong Kong’s Hang Seng Boosted by Xiaomi Electric Vehicle Partnership

The major Asia-Pacific stock indexes rose sharply on Friday, with shares in China and Japan leading the charge higher. The indexes were underpinned initially by a strong performance on Wall Street.

China shares rose in response to a surge in January – February industrial profits which provided a boost to the economic recovery. Hong Kong shares climbed on a technology rebound and South Korean stocks gained on economic optimism. Strong commodity prices helped Australia shares jump.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 29176.70, up 446.82 or +1.56%. Hong Kong’s Hang Seng Index finished at 28336.43, up 436.82 or +1.57% and South Korea’s KOSPI Index closed at 3041.01, up 32.68 or +1.09%.

In China, the Shanghai Index settled at 3418.33, up 54.74 or +1.63% and in Australia, the S&P/ASX 200 index gained 0.5% to close at 6842.20.

China News

Annual profits at China’s industrial firms surged in the first two months of 2021, highlighting a rebound in the country’s manufacturing sector and a broad revival in economic activity from the coronavirus crisis early last year.

China’s blue-chip CSI300 Index rose on Friday and snapped a five-week losing streak, boosted by beaten-down consumer firms and strong inflows from foreign investors. Consumer staples stocks, which have been heavily sold off in recent weeks, led gains. A sub-index tracking the consumer staples sector rose 2.53%, led by foreign investor favorites Kweichow Moutai Co Ltd and Wuliangye Yibin Co.

Hong Kong Shares Rise on Tech Rebound

Hong Kong’s Hang Seng Index ended higher on Friday supported by gains in technology companies, but rising tensions between the West and China led the benchmark index to post losses for the week. The European Union joined Washington’s allies this week in imposing sanctions on officials in China’s Xinjiang region over allegations of human rights abuses, prompting retaliatory sanctions from Beijing.

Tech firms led Friday’s turnaround, up 2.33%. Meituan rose 5.08% and Tencent Holdings Ltd added 2.31%. Xiaomi Corp jumped 6.28% after Reuters reported the company planned to make electric vehicles using Great Wall Motor Co Ltd’s factory.

South Korean Stocks Gain on Economic Optimism

South Korean shares closed higher on Friday as optimism from improving U.S. economic data and an upgrade of growth forecast for the domestic economy lifted sentiment. Among heavyweights, technology giant Samsung Electronics rose 0.37% and peer SK Hynix gained 1.50%. LG Chem was up 1.78% and Naver added 0.79%.

Australia Shares Rise on Steady Commodities, Wall Street Rebound

Australian shares climbed on Friday, lifted by miners and oil and gas explorers as commodity prices stabilized, while an overnight rebound in Wall Street on signs of economic progress also lent support.

Miners led the gains after climbing nearly 1% as Chinese iron ore futures rose amid worries of supply shortages. Rio Tinto and Fortescue Metals Group advanced 1.5% each.

Energy stocks climbed up to 1.1% as oil prices stabilized after a sharp drop overnight. Sector heavyweight Woodside Petroleum rose 2.4% while Santos gained more than 1%.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares: Up Across the Board Early Amid Strong Wall Street Gains

Shares in the Asia-Pacific region were up across the board early Friday as investors followed Wall Street’s lead. U.S. stocks rose late in the session on Thursday after Federal Reserve Chairman Jerome Powell acknowledged that fiscal help from Congress and accelerated vaccine distribution has allowed the U.S. to recover faster than expected.

At 03:50 GMT, Japan’s Nikkei 225 Index is trading 29210.82, up 480.94 or 1.67%. Hong Kong’s Hang Seng Index is trading 28249.34, up 349.73 or +1.25% and South Korea’s KOSPI Index is at 3036.42, up 28.09 or +0.93%.

China’s Shanghai Index closed at 3409.77, up 46.18 or +1.37%. In Australia, the S&P/ASX 200 Index is trading 6826.60, up 36.00 or +0.53%.

“As we make substantial further progress toward our goals, we’ll gradually roll back the amount of Treasurys and mortgage-backed securities we’ve bought,” Powell told NPR’s “Morning Edition” in a live interview. “We will very gradually, over time and with great transparency, when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times.”

Australia Shares rise on steady commodities, Wall Street Rebound

Australian shares climbed on Friday, lifted by miners and oil and gas explorers as commodity prices stabilized, while an overnight rebound in Wall Street on signs of economic progress also lent support, Reuters reported.

Miners led the gains after climbing nearly 1% as Chinese iron ore futures rose amid worries of supply shortages. Rio Tinto and Fortescue Metals Group advanced 1.5% each.

Energy stocks climbed up to 1.1% as oil prices stabilized after a sharp drop overnight. Sector heavyweight Woodside Petroleum rose 2.4% while Santos gained more than 1%.

The financial sub-index rose 0.5%, lifted by embattled wealth manager AMP Ltd, which clawed back from previous session’s losses to climb 5%. AMP shares on track for best session since February 26 after the company reiterated that Francesco De Ferrari would remain as its chief executive officer.

Japanese Shares Jump on Bargain Hunting, Tech Boost

Japanese shares jumped on Friday, led by a bounce back in tech shares, on bargain hunting after a sharp retreat in the benchmark Nikkei Index this week, while overnight Wall Street gains on economic recovery hopes also supported the sentiment, Reuters Reported.

Tech start-up investor SoftBank Group rose 1.73% and was the top contributor to Nikkei, while chip-related shares Tokyo Electron and Advantest jumped 1.7% and 3.29%, respectively.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Markets Finish Mixed; Chip Plant Fire Drives Japan’s Nikkei 2% Lower

The major Asia-Pacific stock indexes finished mixed on Monday with Japan’s benchmark taking a major hit for a second straight session and as investors monitored the financial markets for a reaction to the plunge in the Turkish Lira following a sudden upheaval at the country’s central bank over the weekend. In Japan, investors continued to react the Bank of Japan’s (BOJ) decision to remove guidance to buy exchange-traded funds (ETFs).

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 29174.15, down 617.90 or -2.07%. Hong Kong’s Hang Seng Index finished at 28885.34, down 105.60 or -0.36% and South Korea’s KOSPI Index closed at 3035.46, down 4.07 or -0.13%.

In China, the benchmark Shanghai Index settled at 3443.44, up 38.78 or +1.14% and in Australia, the S&P/ASX 200 Index finished at 6752.50, up 44.30 or +0.66%.

Plunging Turkish Lira Fuels Cautious Trade

Asia-Pacific traders eyed the Turkish Lira on Monday, with the currency dropping more than 8% to 7.7983 against the greenback, compared to levels below 7.5 per dollar seen last week. Earlier, the Lira had weakened to as much as 8.1745 against the greenback.

The plunge was triggered after the country’s central bank saw another upheaval, with President Recep Tayyip Erdogan abruptly replacing its chief just days after a sharp interest rate hike.

China Stocks End Higher on Banking, Infrastructure Boost

China stocks ended higher on Monday, underpinned by banking and infrastructure shares, as the country’s central bank kept its key lending rate for corporate and household loans unchanged.

The session’s gains came in after a four-week losing streak as investors pulled out of highly valued sectors amid policy tightening fears.

Leading the gains, the CSI300 Banks Index rose 2.3%, while the CSI300 Infrastructure Index added 3%.

In other news, China kept its benchmark lending rate for corporate and household loans unchanged for an 11th straight month at its March fixing on Monday, matching market expectations.

China’s monetary policy needs to focus on supporting economic growth in a targeted way while also reducing financial risks, the central bank head said.

Japanese Shares Tumble after Chip Plant Fire, Car Makers Hit

Japanese shares tumbled on Monday as car makers took a hit after a fire at a plant owned by semiconductor supplier Renesas Electronics fanned worries about more chip supply shortfalls hitting vehicle production.

Meanwhile, the Nikkei continued to underperform the broader market, after the Bank of Japan said on Friday it would no longer purchase Nikkei-linked exchange traded funds (ETFs).

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Stock Indexes Finish Lower as Worries over Sino-US Tensions Dampened Risk Appetite

The major Asia-Pacific stock indexes closed lower on Friday as investor sentiment faded, following the weaker trade on Wall Street in the overnight session. A plunge in U.S. technology shares was the biggest drag in the region, while rising Treasury yields were the catalysts driving the price action.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 29792.05, down 424.70 or -1.41%. Hong Kong’s Hang Seng Index finished at 28990.94, down 414.78 or -1.41% and South Korea’s KOSPI Index closed at 3039.53, down 26.48 or -0.86%.

In China, the benchmark Shanghai Index settled at 3404.66, down 58.40 or -1.69% and in Australia, the S&P/ASX 200 Index finished at 6708.20, down 37.70 or -0.56%.

Japan’s Nikkei Dips on BOJ’s ETF Purchase Plan; Topix at 30-year High

Japan’s benchmark Nikkei Index fell while the broader Topix hit a 30-year high, as the Bank of Japan (BOJ) said it would only buy Topix-linked exchange traded funds after a review of its policy-framework.

The Nikkei’s fall accelerated after the BOJ said it would only buy ETFs that are linked to the Topix Index. It also said it would buy up to 12 trillion Yen ($110.21 billion) at most, and slightly broadened a trading band for its 10-year bond yield target, as widely expected.

The so-called NT ratio of the Nikkei and Topix dropped to 14.81 from 15.04 on Thursday. It had hit a record high of 15.68 earlier this month.

“The impact of the BOJ’s move on the Nikkei will be limited,” said Shingo Ide, chief equity strategist at NLI Research Institute. “It will contribute to a healthy correction in the NT ratio.”

Hong Kong Stocks Fall as Yields Spike, Rough Sino-US Talks Weigh

Hong Kong stocks ended lower on Friday, with energy shares leading the decline, as a spike in U.S. 10-year yields overnight and a rough start to China-U.S. bilateral talks weighed on investor sentiment.

The sub-index of the Hang Seng China Enterprises Index fell 1.63%. The sub-index of the Hang Seng tracking energy shares dipped 4.23%, while the materials sector dipped 3.68%, and the healthcare sector ended 3.15% lower.

Meanwhile, China and the United States leveled sharp rebukes here of each others’ policies in the first high-level talks of the Biden administration on Thursday, with deeply strained relations of the two global rivals on rare public display during the meeting’s opening session in Alaska.

Worries over Sino-U.S. tensions dampened risk appetite even as concerns over lofty valuations persisted, said Yan Kaiwen, an analyst with China Fortune Securities Co.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Set to Open Higher after Another Record Performance on Wall Street

The major Asia-Pacific stock indexes are expected to open higher on Tuesday, mirroring the price action in the U.S. markets in the overnight session.

After a mostly sideways trade, U.S. stock indexes climbed, with the benchmark S&P 500 Index and the blue chip Dow hitting intraday record highs. Optimism over the reopening of the U.S. economy offset concerns over the start of the two-day Federal Reserve meeting on Tuesday.

On Monday, the Asia-Pacific markets finished mixed as a few of the major indexes pared some of their gains while other struggled to advance.

In the cash market, Japan’s Nikkei 225 Index settled at 29766.97, up 49.14 or +0.17%. Hong Kong’s Hang Seng Index finished at 28833.76, up 94.04 or +0.33% and South Korea’s KOSPI Index closed at 3045.71, down 8.68 or -0.28%.

In China, the benchmark Shanghai Index settled at 3419.95, down 33.13 or -0.96% and in Australia, the S&P/ASX 200 Index finished at 6773.00.

China Stocks End Lower as Policy Tightening Worries Persist

China shares closed lower on Monday, with heavyweight consumer, healthcare and new energy stocks leading the losses, as the recent conservative annual economic growth target reignited fears Beijing could tighten policy to reign in lofty valuations.

Growth shares have come under intense pressure globally in recent weeks amid rising inflation fears. Such stocks have been hit especially hard in China due to fears that authorities are keen to reduce generous, pandemic-era stimulus.

China’s regulators also have told banks to trim their loan books this year to guard against risks emerging from bubbles in domestic financial markets.

Japan Shares Edge Up as Stimulus Cheer Lifts Cyclicals

Japanese shares inched higher on Monday as optimism around the passage of a massive U.S. stimulus package boosted cyclical stocks, although declines in Softbank Group and other tech companies limited gains.

“Investors are buying cyclical shares that would benefit from a recovery of the U.S. economy, which would be accelerated by the huge economic package that was approved,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

South Korean Stocks End Lower as US Yields Rise; Fed Meeting Eyed

South Korean shares closed lower on Monday, dragged by worries about rising U.S. bond yields, with investors now eyeing the U.S. Federal Reserve’s policy meeting this week. But, the losses were limited by optimism around the passage of a $1.9 trillion stimulus from the United States and better-than-expected Chinese industrial output data.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Mostly Higher Despite Increasing Concerns Over US-China Relations

The major Asia-Pacific stock index futures finished mostly higher on Friday with Hong Kong shares the lone loser after taking a hit from late session selling. The other majors took their cues from Wall Street’s strong performance the previous session.

The catalysts behind the markets’ strength were lower Treasury yields which eased some of the recent pain for technology sector traders, upbeat initial claims data that provided some support for the labor market recovery and President Joe Biden’s signing of the $1.9 trillion coronavirus relief package that is expected to give the economy an extra boost.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 29717.93, up 506.19 or +1.73%. Hong Kong’s Seng Index finished at 28739.72, down 645.89 or -2.20% and South Korea’s KOSPI Index closed at 3054.39, up 40.69 or +1.35%.

China’s Shanghai Index settled at 3453.08, up 16.25 or +0.47% and Australia’s S&P/ASX 200 Index finished at 6766.80, up 52.90 or +0.79%.

China Stocks Post Weekly Drop on Policy Tightening Worries

China shares posted a weekly loss on Friday as a conservative 2021 economic growth target sparked fears Beijing could tighten policy to rein in lofty valuations, though infrastructure firms helped benchmark stocks indexes eke out gains for the day.

Last Friday, China set a modest annual economic growth target, at above 6%, which was significantly below the consensus of analysts, who had expected growth could beat 8% this year.

Chinese Premier Li Keqiang defended the government’s target for more than 6% economic growth this year, saying it was “not low”, and policies would not be dramatically loosened to chase higher growth.

A lower economic growth target gives China room to rein in frothiness in the market even as inflation fears grow, said analysts.

Once high-flying sectors with lofty valuations had been the hardest hit in recent weeks.

Hong Kong Stocks End Week Lower on Sino-US Tensions

Hong Kong stocks fell on Friday to post weekly losses, weighed down by weakness in tech firms on worries about the latest Sino-U.S. tensions.

The United States on Thursday condemned Chinese moves to change Hong Kong’s electoral system and forecast “difficult” talks with Beijing’s top diplomats next week.

China again warned the United States to stop interfering in its affairs, including Hong Kong, foreign ministry spokesman said on Friday.

Shares of Huawei suppliers retreated as the U.S. administration added new limits on those companies.

The Hang Seng Tech Index, which is sensitive to the developments of Sino-U.S. relations, closed down 2.1%, having lost 23% from an all-time high hit just three weeks ago, Reuters reported.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Mostly Higher as Wall Street Sets Friendly Tone

The major Asia-Pacific stock indexes finished mixed but mostly higher on Thursday as investors followed Wall Street’s relatively strong close as Treasury yields dipped in response to mild U.S. consumer inflation data and adequate demand at an auction for the 10-year Treasury notes. The markets were also underpinned after U.S. lawmakers announced the passage of a $1.9 trillion coronavirus relief package.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 29211.64, up 175.08 or +0.60%. Hong Kong’s Hang Seng Index finished at 29385.61, up 478.09 or +1.65% and South Korea’s KOSPI Index closed at 3013.70, up 55.58 or +1.88%.

In China, the Shanghai Index settled at 3436.83, up 79.09 or +2.36% and in Australia, the S&P/ASX 200 finished at 6713.90, down 0.20 or 0.00%.

China Stocks Jump on Better-than-Expected Bank Lending Data, Sino-US Meeting in Focus

China stocks jumped on Thursday, as better-than-expected February bank lending data lifted market sentiment and relieved some policy tightening worries.

Official data showed that new bank lending in China fell less than expected in February from January as the central bank sought to cool credit growth to contain debt risks while maintaining support for ailing small firms.

Sino-U.S. relations re-emerged as another key focus, with some market hopes for de-escalation in the ties between the world’s two largest economies. Chinese diplomats will meet with U.S. officials in Alaska on March 18 and 19, a Chinese foreign ministry spokesman said on Thursday.

South Korea Shares Post Biggest Jump in 2 Weeks as Inflation Worries, Bond Yields Ease

South Korean shares snapped a five-session losing streak posted on Thursday, posting their biggest single-day jump in two weeks, as subdued U.S. consumer price data calmed inflation worries.

“Investors took relief from the U.S. consumer prices data that inflationary pressure will be weaker than expected, which pulled down the bond yields but boosting Asian shares,” said Seo Jung-hun, analyst Samsung Securities.

U.S. consumer prices increased solidly in February, with households paying more for gasoline, but underlying inflation remained tepid.

Further boosting the sentiment was South Korea’s preliminary exports data, which jumped 25.2% from a year earlier during March 1-10 period.

Japanese Shares Gain on Cyclicals Boost, Selling in Some Heavyweights Weighs

Japanese shares inched higher on Thursday as investors picked up beaten-down cyclical stocks while cutting their positions in some index heavyweights.

“Growth-related shares have helped the market, but a sell-off in index heavyweights has also weighed,” said Koichi Kurose, chief strategist, Resona Asset Management.

Chip-related shares fell, with Tokyo Electron declining 1.72% and Advantest losing 0.72%. Both the stocks weighed on the benchmark Nikkei Index, along with medical equipment maker Terumo and drug maker Astellas Pharma, losing 1.24% to 2.31%.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Finish Mixed as Early Gains Fade on China Tightening Concerns

The major Asia-Pacific stock indexes finished mixed on Wednesday after shares in Australia, Japan and South Korea gave up most of their earlier gains. Helping to underpin the market was stronger risk appetite as global bond yields dipped and confidence grew that a massive U.S. stimulus package will be approved on Wednesday.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 29036.56, up 8.62 or +0.03%. Hong Kong’s Hang Seng Index finished at 28907.52, up 134.29 or +0.47% and South Korea’s KOSPI Index closed at 2958.12, down 18.00 or -0.60%.

China’s Shanghai index settled at 3357.74, down 1.55 or -0.05% and Australia’s S&P/ASX 200 Index finished at 6714.10, down 57.10 or -0.84%.

The session in the Asia-Pacific region was impressive early in the session as investors followed Wall Street’s lead where bond yields declined and tech stocks soared.

“Global equities pushed higher as risk appetite returned, according to a Wednesday morning note from analysts at ANZ Research. “Investor confidence was buoyed by expectations that (U.S. President Joe) Biden’s $1.9 trillion fiscal stimulus package will soon be approved.

Democrats in the U.S. House of Representatives are aiming to pass the $1.9 trillion coronavirus relief bill on Wednesday so that Biden can sign it by the weekend.

Hong Kong Shares Boosted by Strong Tech Stock Performance

Hong Kong shares closed higher on Wednesday, led by tech stocks as the NASDAQ Index surged on Wall Street on a retreat in U.S. bond yields. Gains may have been capped, however, by fears of policy tightening in China.

The Hang Seng China Enterprises index rose 0.79% to 11,059.67. The IT sub-index climbed 2.64%, while the energy sector dipped 1.6%.

South Korean Shares Decline for Fifth Session

South Korean shares closed lower for a fifth straight session on Wednesday, as uncertainties around volatile Chinese markets spooked investors even after the tech-heavy NASDAQ Index rebounded overnight.

There are doubts about whether a rout in China will stabilize, especially as Chinese inflation and producer prices exceeded expectations, said Lee Kyoung-min, an analyst at Daishin Securities.

Among the heavyweight companies, technology giant Samsung Electronics fell 0.61 percent and peer SK Hynix fell 2.56 percent, while LG Chem rose 3.48 percent and Naver rose 2.90 percent.

China’s Blue-Chip Index Ends Higher, Policy Tightening Worries Cap Gains

China’s benchmark index closed lower, but the country’s blue chip shares closed higher on Wednesday, a day after it hit a near 3-month low, although gains were capped by lingering concerns of policy tightening as the economy recovers.

In economic news, China’s factory gate prices rose at the fastest pace since November 2018 in February as manufacturers raced to fill export orders, raising expectations for robust growth in the world’s second-largest economy in 2021.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Tumble on Resurgent Worries Over Rising US Bond Yields

The major Asia-Pacific stock indexes finish lower across the board on Thursday, led by a steep drop in technology shares, fueled by a similar move on Wall Street on Wednesday. The catalyst behind both moves was a rise in bond yields.

During the U.S. session, the 10-year Treasury yield ticked up to 1.47%, pressuring areas of the market with high valuations. It was still off last week’s peak of above 1.61% that roiled stock markets as investors bet on rising inflation.

Rising interest rates disproportionately hurt high-growth companies in both the U.S. and Asia because investors value them based on earnings expected years into the future, and high interest rates hurt the value of futures earnings more than the value of earnings made in the short-term.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 28930.11, down 628.99 or -2.13%. Hong Kong’s Hang Seng Index finished at 29236.79, down 643.63 or -2.15% and South Korea’s KOSPI Index closed at 3043.49, down 39.50 or -1.28%.

In China, the Shanghai Index settled at 3503.49, down 73.41 or -2.06% and in Australia, the S&P/ASX 200 Index finished at 6760.70, down 57.30 or -0.84%.

Global Selling Trips Australian Shares

Australian shares fell on Thursday as renewed worries about rising U.S. bond yields soured risk sentiment globally.

The S&P/ASX 200 Index was also weighed down by miners Rio Tinto and BHP Group and supermarket chain Woolworths Group as they traded ex-dividend.

Tech stocks fell 1.5%, tracking a sell-off in U.S. peers. Buy-now-pay-later firm Afterpay slid more than 2%, while Xero Ltd shed 3%.

In economic news, Australia’s January retail sales increased 0.5% month on month on a seasonally adjusted basis, according to data published Thursday by the Bureau of Statistics. That compared against expectations for a 0.6% increase in a Reuters poll.

The country also recorded a trade surplus of 10.142 billion Australian Dollars (about $7.88 billion), higher than expectations in a Reuters poll for a 6.5 billion Australian Dollar trade surplus.

Hong Kong Stocks End Lower on Material, Tech Firms

Hong Kong shares dropped on Thursday, weighed down by losses in material and tech stocks, as equities globally retreated on renewed doubts over monetary support after another rise in U.S. Treasury yields. The sub-index of the Hang Seng tracking tech shares dipped 5.8%, while the IT sector dropped 5.3%, and the material sector ended 6.4% lower.

Japan’s Nikkei Hits 1-Month Low as US Futures Slump

Japan’s Nikkei Index on Thursday dropped to its lowest in one month, as investors sold off heavyweights including SoftBank Group and Fast Retailing, tracking a slump in U.S. futures during the Asian trade.

SoftBank Group fell 5.19% in the wake of news that British supply chain finance firm Greensill Capital, which is backed by the Japanese conglomerate, was in talks to sell large parts of its business.

“There are uncertainties in the move of U.S. bond yields, which has made the market outlook unclear,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Markets Post Solid Gains; Aussie Shares Higher after GDP Rose 3.1%

The major Asia-Pacific stock indexes were sharply higher on Wednesday as a private survey showed slowing services sector activity in China last month. Investors likely interpreted the news to mean the Chinese economy is not heating up as previously thought, thereby raising the possibility that current stimulus measures would be extended.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 29559.10, up 150.93 or +0.51%. Hong Kong’s Hang Seng Index is trading 29836.51, up 740.65 or +2.55% and South Korea’s KOSPI Index finished at 3082.99, up 39.12 or +1.29%.

China’s Shanghai Index settled at 3576.90, up 68.31 or +1.95% and Australia’s S&P/ASX 200 Index finished at 6818.00, up 55.70 or +0.82%.

China’s Services Sector Grows at Slowest Rate in 10 Months in February:  Caixin PMI

China’s services sector activity grew at its slowest pace in 10 months in February as firms struggled with sluggish demand and high costs, a private sector survey showed on Wednesday, prompting them to cut jobs.

The Caixin/Markit Services Purchasing Managers’ Index (PMI) fell to 51.5, the lowest since April, from 52.0 in January but remained above the 50-mark that separates growth from contraction on a monthly basis. Investors shrugged off the results from the report, expecting better numbers in the future.

“We expect manufacturing and services PMIs to recover in March, as the COVID-19 situation was quickly brought under control in recent weeks. Beijing may gradually relax some social distancing rules in coming months and some pent-up demand could be released,” Nomura wrote.

China Stocks Gain the Most in 3 Weeks on Growth Optimism

China stocks posted their biggest one-day gain in three weeks on Wednesday, led by banking and commodity shares, as hopes of domestic economic growth offset fears of tighter monetary policy. Some traders also attributed the market strength to bullishness ahead of the annual gathering of the National People’s Congress, which starts on Friday.

China’s top banking watchdog said on Tuesday regulators were studying effective measures to reduce the risk of foreign capital inflows. The remark is interpreted by some as pointing to Beijing’s little willingness to lift interest rates, a move that could invite more inflows.

Larry Hu, an economist at Macquarie Capital Ltd, said that there’s no need to worry about inflation in China. For 2021, we expect China to see reinflation, but not high inflation,” Hu wrote. “The reinflation trend is great news to COVID losers such as financials and industrial companies.”

Australia Shares Climb as Strong GDP Growth Cements Recovery Hopes

Australian shares climbed on Wednesday after a much faster-than-expected economic growth in the final quarter of 2020 cemented hopes of a stronger recovery this year. Data showed the economy accelerated 3.1% in the December quarter, higher than forecasts for a 2.5% rise.

A very low community transmission of COVID-19, coupled with massive and timely fiscal and monetary stimulus, has led to a strong rebound in the economy.

“The big picture is that while the initial recovery through the first half of 2021 may still be subject to air-pockets and jobs vulnerabilities linger…Australia is unambiguously on a surer path to sustained recovery,” Mizuho analysts said in a note.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Indexes: Post Weekly Losses as Global Bond Yield Surge Wreaks Havoc

The major Asia-Pacific stock indexes finished lower last week as investors followed Wall Street lower with a selling spree driven by a U.S. Treasury bond yield surge.

Hong Kong stocks posted their worst week in a year, while worries about central bank tightening and new corporate regulations pressured Chinese shares. Foreigners were net sellers of Japanese stocks on the yields rise, but the Bank of Japan took advantage of the stock market rout with an ETF buy for the first time this month.

South Korean shares posted their worst weekly performance in nearly 2-1/2 years as the bond yields surge crushed demand for technology stocks. Australian shares also tumbled on firmer bond yields and a plunge in technology and miners shares.

Cash Market Performance

In the cash market last week, Japan’s Nikkei 225 Index settled at 28966.01, down 1051.91 or -3.50%. South Korea’s KOSPI Index finished at 3012.95, down 94.67 or -3.05% and Hong Kong’s Hang Seng Index closed at 28980.21, down 1664.52 or -5.43%.

In China, the Shanghai Index settled at 3509.08, down 187.19 or -5.06% and in Australia, the S&P/ASX 200 Index finished at 6673.30, down 120.50 or -1.77%.

Hong Kong Stocks Post Worst Week in One Year as Bond Yields Surge

Hong Kong stocks ended sharply lower last week, in line with broader markets, posting their worst week in one year, as a rout in global bonds sent yields flying and dampened appetite for risky assets.

For the week, HSI tumbled 5.4%, while HSCE slumped 7.1%, both logging their steepest drops since the week to March 13, 2020.

Earlier in the week, Hong Kong shares posted their worst daily performance in more than nine months on Wednesday after the city announced a hike in stamp duty on stock trading, prompting huge outflows of mainland cash.

China Shares Slump Most in Seven Months as Tightening Fears Mount

Chinese shares closed lower last week, with the benchmark stock index witnessing its biggest daily drop in seven months, as investors worried about high valuations amid growing concerns of tightening in policies.

China’s benchmark index lost ground over policy-tightening worries, after advancing to a more than 13-year high in February on optimism around the country’s economic recovery. That is despite indications that while the central bank will scale back support for the economy in 2021 and cool credit growth, fears of debt defaults and a derailed recovery will prevent it from tightening any time soon.

Nikkei Drops to Near 3-week Low as Spike in Bond Yields Spooks Investors

Japanese shares slumped last week, while logging their biggest daily decline in nearly a year, after a spike in global bond yields spooked investors already uneasy about the market’s stretched valuation.

Helping to possibly curb the selling pressure, the Bank of Japan bought exchange-traded funds (ETFs) on Friday for the first time this month as Tokyo stock prices slumped, data showed, in a sign the central bank is becoming more flexible with its asset purchases.

The BOJ bought 5 million yen ($47,068) worth of ETFs on Friday, central bank data showed. Some analysts saw the BOJ’s moves in February as a prelude to what may come out of a March review of its policy tools to make its asset-buying program more nimble.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Plummet as Higher Global Bond Yields Spook Investors; Japan’s Nikkei Loses Nearly 4%

The major Asia-Pacific stock indexes dropped sharply and regional bond yields rose on Friday after U.S. Treasury yields jumped, as prospects for higher inflation and economic growth increased, making investors doubt that central banks would retain ultra-low interest rates for a longer period.

Cash Market Performance

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 28966.01, down 1202.26 or -3.99%. Hong Kong’s Hang Seng index finished at 28980.21, down 1093.96 or -3.64% and South Korea’s KOSPI Index closed at 3012.95, down 86.74 or -2.80%.

In China, the Shanghai Index settled at 3509.08, down 75.97 or -2.12%. In Australia, the S&P/ASX 200 Index finished at 6673.30, down 160.70 or -2.35%.

Tracking Global Bond Yields

Investors continued to track bond yields during Friday’s session. Overnight, the yield on the benchmark 10-year U.S. Treasury note briefly crossed the 1.6% level to trade at its highest level in more than a year.

U.S. bond yields eased in the afternoon of Asia trading hours on Friday. The yield on the 10-year was last at 1.4719%, while the yield on the 30-year Treasury bond sat at 2.2636%.

In Asia-Pacific, the yield on the Australian 10-year bond slipped to 1.834% after touching a high of 1.973% earlier. The 10-year Japanese government bond’s yield also declined to 0.156%. Earlier, the yield on the 10-year JGB had risen as high as 0.181% – a level not seen since early 2016, according to FactSet.

Japan Stocks Crumble as Bond Market Rout Wreaks Havoc

Japanese shares slumped on Friday, logging their biggest daily decline in nearly a year, after a spike in global bond yields spooked investors already uneasy about the market’s stretched valuation.

All of the Tokyo Stock Exchange’s 33 industry subindexes were in the red, with electronic machinery makers, pharmaceuticals and real estate companies falling more than 3%.

Semiconductor-related shares, one of the main leaders of the market’s rally to 30-year highs, succumbed to heavy selling, after U.S. chip shares fell 5.8%.

South Korean Shares Post Worst Weekly Fall in 1-Month on Foreign Selloff, US Tech, Bond Rout

South Korean shares reversed most gains clocked in the previous session on Friday, dragged down by a record foreign selloff, following a sharp overnight fall in Wall Street tech shares and a spike in Treasury bond yields.

For the week, it tumbled 3.05%, its sharpest decline in four weeks, while it gained 1.23% on a monthly basis, extending gains to a fourth straight month.

China, Hong Kong Stocks Drop Over 2% as Bond Yields Surge

China and Hong Kong stocks fell sharply on Friday, in line with broader markets, as a rout in global bonds sent yields flying and dampened appetite for risky assets.

Fears over policy tightening and lofty valuations had already pummeled China’s benchmark CSI300 index, which was down nearly 10% from its record high hit earlier in the month, mainly due to heavy selling in high-flying sectors such as consumer, healthcare and new energy firms.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Up Across the Board after Fed Chair Powell’s Reaffirmation of Low Interest Rates

The major Asia-Pacific stock indexes were up across the board on Thursday as investors followed the lead set by the strong performance on Wall Street the previous session.  Shares in South Korea posted the biggest gain.

The bullish tone was set by the moves on Wall Street as U.S. Federal Reserve Chair Jerome Powell continued to downplay the threat of inflation, saying it could take three years to reach the central bank’s target consistently.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 30168.27, up 496.57 or 1.67%. Hong Kong’s Hang Seng Index finished at 30074.17, up 355.93 or +1.20% and South Korea’s KOSPI Index closed at 3099.69, up 104.71 or +3.50%.

In China, the Shanghai Index settled at 3585.05, up 20.97 or +0.59%. Australia’s S&P/ASX 200 Index finished at 6834.00, up 56.20 or +0.83%.

In Wednesday’s testimony in front of the House Financial Services Committee, Powell said inflation could be volatile as the economy reopens and there’s increased demand. Still, the Fed chair does not expect inflation to run hot and said the central bank has tools to combat it if it should.

South Korea Shares End Firmer as Fed’s Powell Soothes Inflation Fears

South Korean shares posted on Thursday their best day in almost two months, driven by chip heavyweights and foreign buying, after U.S. Federal Reserve Chair Jerome Powell’s reaffirmation to keep interest rates low boosted risk appetite globally.

Chip giants Samsung Electronics and SK Hynix rose 4.02% and 9.19%, respectively, while Naver and LG Chem added 2.41% and 3.49%.

In other news, the Bank of Korea said it was in no rush to remove monetary stimulus even with inflationary expectations on the rise, as the pandemic continues to cloud economic outlook.

Hong Kong Stocks Rebound as Investors Look Past Proposed Stamp Duty Hike

Hong Kong shares bounced on Thursday after posting their worst session in over nine months a day earlier, as investors largely looked past Hong Kong’s move to raise stamp duty on stock trading.

The hike could create some short-term negative impact on stock trading, Yang Lingxiu, chief strategist at Citic Securities, said. Economic recovery and listings of new-economy companies and some U.S.-listed Chinese firms’ secondary listing, however, would continue to attract fund inflows into Hong Kong, he added.

Hong Kong brokerages could have to absorb the government’s planned increase in stock trading stamp duty or reduce their already wafer-thin commissions, according to brokers, amid concerns the higher levy will reverse a retail buying craze.

China Shares End Higher on Gains in Property Firms

China shares rebounded on Thursday, as strong gains in the property sector helped the market recover from sharp losses made a day earlier.

Property shares were among the top gainers after some research notes by local brokerages said the valuation of the real estate sector was at a historically low level. A gauge that tracks the sector jumped 8.17%.

Separately, sentiment was slightly supported by Chinese President Xi Jinping celebrating “complete victory” in the effort to eradicate rural poverty at a ceremony in Beijing on Thursday to mark a signature initiative of his eight-year tenure.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Expected to Open Higher after Fed’s Powell Eases Fears of Policy Shift

If the price action in the U.S. is any indication, Asia-Pacific stock index traders should expect volatility and a bias to the upside on the opening. Late in the session on Tuesday, all three major U.S. stock index futures are trading high after recovering from early session weakness.

U.S. shares bounced off their lows after Federal Reserve Chair Jerome Powell said in his testimony to Congress that inflation is still “soft” and the economic outlook is still “highly uncertain,” easing fears of a policy change by the central bank.

“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved, the Fed chief said in prepared remarks for the Senate Banking Committee.

Tuesday’s Asia-Pacific Recap

Shares in the Asia-Pacific region finished mixed on Tuesday, as investors monitored the sell-off in regional technology stocks after their counterparts tanked on Wall Street overnight.

In the cash market on Tuesday, Hong Kong’s Hang Seng Index settled at 30632.64, up 312.81 or +1.03% and South Korea’s KOSPI Index finished at 3070.09, down 9.66 or -0.31%. Japan was closed for a holiday.

In Australia, the S&P/ASX 200 Index settled at 6839.20 and China’s Shanghai Index closed at 3636.36, down 6.09 or -0.17%.

Hong Kong Stocks End Higher on Gains in Financials, Energy Firms

Hong Kong stocks closed higher on Tuesday, helped by gains in financial and energy firms on hopes of a faster economic recovery globally.

The Hang Seng Financials Index climbed 2.1% to lead the gains. The index is up 12.3% so far this year. The Hang Seng Energy Index advanced 2.6% as oil prices jumped.

Galaxy Entertainment Group surged as much as 12% to a record high of HK$78.20, the top mover among Macau’s gaming stocks that advanced on reports of a strong rebound in gaming revenue during the Chinese New Year.

Investors have started to wonder if some stocks were overvalued, leading to a correction in consumer and new economy stocks that had been favored by investors, Guodu Hong Kong noted in a report.

China Stocks End Lower, Losses Limited by Gains in Financials

China stocks closed lower in volatile trading on Tuesday, after a sharp correction the previous session, as worries over policy tightening weighed on sectors with lofty valuations, although losses were limited by gains in financial shares.

South Korean Shares End Lower Amid Rising Yields, Inflation Worries

South Korean shares closed lower on Tuesday, marking a negative finish for a fourth session in five, as the appeal of equities was dented amid higher bond yields and inflation outlook.

In other news, the Korean central bank chief said he will consider stepping up government bond purchases if an increase in issuance adds to volatility in yields, but stopped short of offering a concrete plan.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Led Lower by China Weakness, Rising Rate Fears

The major Asia-Pacific stock indexes finished mixed but mostly lower on Monday amid rate fears. Meanwhile, China left its benchmark lending rate unchanged over the weekend. Mainland Chinese stocks led losses among the region’s major markets as they closed lower, but Japan bucked the trend to finish higher.

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 30156.03, up 138.11 or +0.46%. Hong Kong’s Hang Seng Index finished at 30319.83, down 324.90 or -1.06% and South Korea’s KOSPI Index closed at 3079.75, down 27.87 or -0.90%.

In China, the Shanghai Index settled at 3642.44, down 53.72 or -1.45% and in Australia, the S&P/ASX 200 finished at 6780.90, down 12.90 or -0.19%.

China Blue-Chips Slump Most in Nearly 7 Months on Valuation, Policy Tightening Concerns

China’s blue-chip index posted its biggest daily drop in nearly seven months on Monday after touching record highs last week, as investors fretted over high stock valuations and the risk of policy tightening.

China left its benchmark lending rate for corporate and household loans unchanged for a 10th straight month on Saturday, but speculation has been rising that authorities may begin to adopt a tighter policy stance.

Monetary conditions have tightened in practice since the start of the year. We expect the PBOC to formalize the shift with policy rate increases in the next few months,” said analysts at Capital Economics.

The consumer staples sector slumped 5.96%, the healthcare sub-index dropped 5.15% and the financial sector sub-index shed 1.75%.

South Korea Shares Fall on US Yield Spike, China Policy Tightening Woes

South Korean shares ended lower on Monday, reversing early gains, as strong local exports data were offset by a spike in U.S. Treasury yields and concerns about policy tightening in China. The won weakened, while the benchmark bond yield rose.

Most heavyweights slid, with chip giant Samsung Electronics down 0.48%, while internet giant Naver and LG Chem tumbled 2.89% and 2.66%, respectively. Samsung’s peer SK Hynix, however, rose 2.63%.

U.S. 10-year Treasury yields spiked on expectations that massive government stimulus would lead to higher growth and inflation, while there are mounting speculation that the Chinese authorities may begin to adopt a tighter policy stance.

The Bank of Korea is expected to keep interest rates at a record low on Thursday, as a sluggish labor market keeps policymakers under pressure.

Japanese Shares Jump as Recovery Hopes Lift Cheap Cyclical Stocks

Japanese shares jumped on Monday, snapping a three-day losing streak, as optimism on economic recovery from the pandemic prompted fresh buying in materials, travel-related and other cheap cyclical stocks.

Investors scooped up cyclical shares with cheap valuation including Yokohama Rubber and Sumitomo Metal, which gained 8.9% and 7.2%, respectively.

Travel-related shares also advanced as investors bet on a continued recovery in the global economy with COVID-19 vaccination programs gathering pace across the world.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares to Open Flat as Investors Eye Rising Global Yields, Volatile Crude Oil Prices

The major Asia-Pacific stock indexes are expected to open Monday’s session flat with the early price action a response to the mixed performance on Wall Street and the plunge in crude oil prices. Concerns over a weakening U.S. labor market will be another price driver as well as global vaccination progress. Traders will also be watching for a rotation out of high-flying technical stocks into cyclical shares.

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 30017.92, down 218.17 or -0.72%. In Hong Kong, the Hang Seng Index finished at 30644.73, up 49.46 or +0.16% and in South Korea, the KOSPI Index closed at 3107.62,

In China, the Shanghai Index settled at 3696.17, up 20.81 or +0.57% and in Australia, the S&P/ASX 200 finished at 6793.80.

Traders will be watching global oil prices early Monday after oil prices fell for a second session on Friday, retreating further from recent highs, as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages. Rising global bond yields will also be eyed by investors as a reason to trim aggressively long positions.

Last Week’s Recap

Hong Kong Stocks Post Third Weekly Gain on Economic Recovery Bets

Hong Kong shares ended higher on Friday to deliver the third weekly gain, underpinned by material stocks, as investors cheered data from major economies pointing to a global economic recovery from the COVID-19 pandemic fallout.

Leading the gains on Friday, the Hang Seng Materials Index climbed 3.1%, having climbed 15.5% in its best week since April 2015. Telecommunications firms also advanced with an 11% jump for the week.

China’s Blue-Chip Index Ends Week Lower on Policy Tightening Worries

China’s blue-chip index recouped earlier losses to end higher on Friday, helped by gains in infrastructure and securities stocks, though it posted weekly losses on investor concerns over policy tightening and lofty valuations.

Leading the gains for the day, the CSI300 Infrastructure Index jumped 2.9%, while the CSI SWS Securities Index climbed 2.7%. Among sectors with high valuations, the CSI 300 Consumer Staples Index retreated 2.6%, snapping a four-week gain, while the CSI300 Healthcare Index slumped 4.3%.

The big fear for investors is that the People’s Bank of China (PBOC) would start to drain liquidity sooner than the U.S. Fed, while there are already expectations of a rise in the domestic interest rate. Jin Jing, an analyst with Caitong Securities warned, “Investors could start to rebalance their allocations, shifting out of expensive stocks towards cyclical players with low valuations that would benefit from an economic recovery.”

Australia Shares Track Asian Peers Lower, Commodity Stocks Weigh

Australian shares has their worst session in three weeks on Friday, tracking losses in Asian peers, as a worse-than-expected rise in weekly U.S. jobless claims tempered hopes for a quick economic recovery.

Energy stocks saw their worst session in 4-1/2 months, slumping 3.6% as oil prices dropped. Minters had their worst day in three weeks as gold prices sank to a seven-month low as rising U.S. Treasury yields eroded the bullion’s appeal as an investment.

Nikkei Slips on Profit-Taking, Logs Weekly Gain

Japan’s Nikkei share average slipped on Friday as profit-taking ahead of the weekend trumped optimism over a broad economic recovery, though the index gains for a third week.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Finish Mixed as Investors Eye Rise in Treasury Yields

The major Asia-Pacific stock indexes finished mixed on Wednesday as investors reacted to the rise in U.S. Treasury yields that derailed the U.S. stock market rally the previous session. The market reopened in Hong Kong after a long holiday, but markets in mainland China remained closed on Wednesday for the Lunar New Year holidays.

Cash Market Performance

In Japan, the Nikkei 225 Index settled at 30292.19, down 175.56 or -0.58%. Hong Kong’s Hang Seng Index finished at 31084.94, up 338.28 or +1.10% and South Korea’s KOSPI Index closed at 3133.73, down 29.52 or -0.93%. Australia’s S&P/ASX 200 Index settled at 6885.20, down 32.10 or -0.46%.

US Stocks Pressured by Treasury Yield Jump

Overnight on Wall Street the benchmark S&P 500 Index settled lower as the benchmark 10-year Treasury yield jumped 9 basis points to top 1.3% – a level not seen since February 2020. The 30-year rate also hit its highest level in a year. The yield on the 10-year Treasury last stood at 1.2989%.

Hong Kong Stocks End Higher Ahead of China Markets Reopening

Hong Kong stocks ended higher on Wednesday, marking the seventh straight session of gains and extending a bull run ahead of the reopening of mainland markets after the Lunar New Year break, with sentiment lifted by optimism over global economic recovery.

The Hang Seng Index rose 1.10%, reaching its highest close since June 2018, while the China Enterprises Index increased 1.60%. The Hang Seng Tech Index surged 2.34% and the Hang-Seng sub-index tracking information technology firms climbed 1.88%.

An improving pandemic situation and expectations the bull run will continue when China markets reopen helped lift investor sentiment.

Japan Shares Slip from 30-year High on Profit Taking, Pandemic-Hit Stocks Rise

Japanese shares fell on Wednesday as investors booked profits after a recent rally drove them to a 30-year high, even as pandemic-beaten shares gained on expectations for an economic recovery from a coronavirus-driven slump. The declines followed a drop overnight in U.S. technology stocks.

“Investors are selling stocks for profit booking today. The market is taking a pause from a rising momentum,” said” Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

“Shares that were beaten down amid the pandemic are being bought as rising interest rates in the U.S. and Japan indicates an economic recovery. Rollouts of COVID-19 vaccines in Japan is another positive factor.”

South Korea Shares Snap Three-Session Winning Streak as Virus Cases Jump, U.S. Yields Rise

South Korean shares fell on Wednesday, after gaining for three consecutive sessions, as investor sentiment sapped on concerns over rising coronavirus cases at home and following a surge in U.S. Treasury yields on worries that a stimulus-fueled global recovery will stoke inflation.

Among major heavyweights, chip giants Samsung Electronics and SK Hynix dropped 2% and 1.9%, respectively, while LG Chem and Hyundai Motor slipped 2.2% and 1.6% each.

In other news, South Korea’s Prime Minister, Chung Sye-kyun, warned against the loosening enforcement of social-distancing rules after the country reported 621 new infections as of Tuesday midnight, the highest levels in 39 days.

For a look at all of today’s economic events, check out our economic calendar.

BHP Shares Gain on Strong Profit and Record Dividend; Target Price GBX 2,560

BHP Group, one of the largest diversified natural resource companies in the world, delivered a strong profit in the first half of the 2021 financial year and declared record half-year dividend of $1.01 per share and ROCE up to 24%, helping its shares soar over 5% on Monday.

The Anglo-Australian multinational mining, metals and petroleum dual-listed public company said its profit from operations rose 17% to $9.8 billion, up. Attributable profit came in at $3.9 billion, which included an exceptional loss of $2.2 billion predominantly related to the impairments of New South Wales Energy Coal and associated deferred tax assets, and Cerrejón.

The world’s largest listed miner said its underlying attributable profit rose 16% to $6.0 billion.

The London-listed BHP‘s shares, which surged over 8% in 2020, had risen about 16% so far this year. The stock closed 5.22% higher at GBX 2,228 on Monday.

“Our analysis shows that the fair value estimate for BHP is between a bear case of GBX 1,200 per share and a bull case of GBX 2,950 per share, leading to our high fair value uncertainty rating,” said Mathew Hodge, director at Morningstar.

“The bulk of our BHP Billiton fair value estimate derives from just three commodities: iron ore, copper, and petroleum, in broadly equal contributions of approximately one third apiece. Coking coal is a minor contributor.  As commodity prices tend to move in unison, our valuation scenario uses high, low, and baseline prices. We don’t split individual commodities out.  Our price scenarios also factor in currency, operating, and capital cost adjustments.”

The dual-listed company forecasts to make an investment decision soon on its $5.3-$5.7 billion Jansen potash project in Canada and the Scarborough natural gas project off Western Australia, in which BHP will invest $1.4-1.9 billion, Reuters reported.

BHP Stock Price Forecast

Fourteen analysts who offered stock ratings for BHP in the last three months forecast the average price in 12 months of GBX 2,146.43 with a high forecast of GBX 2,560 and a low forecast of GBX 1,610.

The average price target represents a -3.66% decrease from the last price of GBX 2,228. From those 14 analysts, seven rated “Buy”, six rated “Hold”, one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of GBX1,950 with a high of GBX4,380 under a bull scenario and GBX680 under the worst-case scenario. The firm gave an “Overweight” rating on the natural resource company’s stock.

“We value BHP based on a simple average of our EV/EBITDA and P/NAV methodologies. This allows us to reflect both the shorter-term earnings power and longer-term value of the company. We apply an EV/EBITDA multiple of 6.7x, in line with its historical average. We apply a 1.0x multiple to our NPV estimate, which is based on a blended WACC of 9% and terminal growth rate of 2.0% from 2035,” said Alain Gabriel, equity analyst at Morgan Stanley.

Several other analysts have also upgraded the stock outlook. Citigroup raised the price target to GBX 2,100 from GBX 2,000. Berenberg initiated the coverage with hold rating and GBX 2,000 price target. Credit Suisse cuts to neutral from outperform; raises target price to GBX 2,100 from GBX 1,900.

In addition, UBS upped the target price to GBX 2,200 from GBX 2100. Independent Research increased the target price to GBX 2,100 from GBX 1,660 and rated hold. RBC cuts target price to GBX 2,500 from GBX 2,600. Liberum cuts price target to GBX 1,880 from GBX 2,400.

Analyst Comments

BHP declared a solid dividend of USc101/sh, exceeding our and cons. estimates of USc84-85/sh. Underlying EBITDA was in-line with cons. and within 1% of MSe but EPS missed by 2-5% on higher depreciation. Net Debt was broadly in-line and opex guidance was unchanged but is still based on favourable FX,” Morgan Stanley’s Gabriel added.

BHP‘s portfolio mix and quality stand out among peers. The low-cost position of its assets enables the company to generate FCF yield even in a stress scenario. It maintains a strong B/S, giving flexibility to pursue growth and/or increase cash shareholder returns, in particular given the company’s net debt target of US$12-17bn (post IFRS16 adjustment) vs FY20 levels of US$12.5bn. Spot FCF yields are comparable to peers, even without contributions from the Petroleum division, thus implying long-term optionality to a potential oil price recovery. We prefer BHP on a relative basis, given its attractive commodity mix ex-Iron Ore and free optionality on a potential oil price recovery.”

Upside and Downside Risks

Risks to Upside: Growth projects (Jansen potash, Escondida growth, Spence hypogene, Olympic Dam) successfully executed. Better operating performance, lower costs and capital expenditure. Higher commodity prices – highlighted by Morgan Stanley.

Risks to Downside: Execution issues at growth projects (Jansen potash, Escondida growth, Spence hypogene, Olympic Dam). Weak operating performance, higher costs and capital expenditure. Lower commodity prices.

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