Asian investors were in a wait-and-see mood on Tuesday, with indices rising ahead of the US Federal Reserve meeting this week.
Chinese markets were the outliers boosted by Beijing’s promise of a $44 billion war chest to help its ailing real estate sector, but traders elsewhere stayed on the sidelines ahead of US growth data. and a slew of US earnings reports all set to come out this week.
Japan’s Nikkei saw a slight decline, while the broader Topix was flat as investors kept their cards close to their chests. The Nikkei closed down 0.16%, its second consecutive daily decline. Turnover, like Monday, was light.
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“Markets are definitely in a wait-and-see mode, what you’re seeing is a slight adjustment in position,” said Jeffrey Halley of Singapore-based brokerage OANDA. “It’s the calm before the storm.”
Tech investor SoftBank Group Corp rose 3.2% – its biggest daily gain in about a month – after Hong Kong shares rose for one of its holdings, Chinese tech giant Alibaba. Alibaba plans to add a main listing in Hong Kong.
Japan also improved its overall view of the economy for the first time in three months in July, as the government turned more positive on consumption and employment.
Chinese stocks rebounded as property developers continued to rise after Beijing planned to set up a fund to help the struggling industry.
Property developers jumped 5.4% in China and mainland developers climbed 3.3% in Hong Kong, extending gains from the previous session.
The CSI300 index rose 0.9% to 4,250.82 at the end of the morning session, while the Shanghai Composite Index rose 0.83%, or 27.05 points, to close at 3,277.44.
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The Hang Seng Index gained 1.67%, or 342.94 points, to 20,905.88, while the Shenzhen Composite Index on China’s second-largest stock exchange rose 1.01%, or 21.87 points, to 2,187, 23. China’s Hong Kong Enterprise Index gained 1.5% to 7,182.28.
The Hang Seng Tech index rose 1.5%, with Alibaba Group up 5% to lead the gains.
Alibaba will apply for a main listing in Hong Kong and keep its listing in the United States, and Ant Group executives are no longer part of the Alibaba Partnership, a body that can appoint a majority of the e-commerce giant’s board. .
Elsewhere in the region, shares in Kuala Lumpur and Bangkok fell 0.2% to 0.8%.
Taiwan stocks fell 0.9%, a day after China issued harsher warnings to US officials over a possible visit by House Speaker Nancy Pelosi to Taiwan.
Indian stocks fell with Mumbai’s Nifty 50 index down 0.67%, or 112.10 points, to 16,518.90.
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Globally, investors are bracing for a likely 75 basis point interest rate hike from the Federal Reserve later this week – with markets pricing around 10% risk of a bigger hike, and waiting to see if the economic warning signs prompt a change in rhetoric.
“We think 75 basis points is the most likely but won’t be the endgame unless they see demand destruction and some moderation in inflation,” said John Milroy, investment adviser at Ord Minnett.
“We fear they will further slow the US economy.”
Big tech companies such as Apple, Microsoft and Amazon.com are due to report results this week.
In currencies, the dollar weakened slightly but did not deviate too far below recent highs as uncertainty continued to swirl around interest rates and the economic outlook.
Oil prices rose further on expectations that reduced natural gas supplies from Russia to Europe could encourage a switch to crude, with Brent futures lately rising 1.27% to $106.45 a barrel and US crude up 1.26% to $97.92 a barrel.
Benchmark 10-year Treasury yields fell to 2.875% as growth concerns supported bonds.
Hong Kong – Hang Seng Index > UP 1.67% to 20,905.88 (closing)
Shanghai – Composite > UP 0.83% to 3,277.44 (close)
New York – Dow Jones up 0.28% at 31,990.04 (close Monday)
- Reuters with additional editing by Sean O’Meara
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