China stocks rebound off five-year lows as stimulus comes into effect; most Asia markets drop

China stocks reversed losses on Monday, rebounding off five-year lows, while most Asia markets kickstarted the holiday-shortened week largely lower on fears of higher-for-longer interest rates.

The U.S. Federal Reserve Chair Jerome Powell said the central bank would likely move at a considerably slower pace on rate cuts compared with market expectations.

Separately, the People’s Bank of China’s decision, announced two weeks ago, to cut the reserve ratio requirements for banks by 50 basis points came into effect on Monday.

Hong Kong’s Hang Seng index ended nearly flat, while mainland China’s CSI 300 climbed 0.65% to 3,200.42, reversing losses from earlier in the day. The Caixin survey on services sector activity in China showed a softer expansion for January, compared to December.

South Korea’s Kospi dropped 0.73%, dragged by losses in heavyweight Samsung Electronics and the small-cap Kosdaq fell 0.79%.

In Australia, the S&P/ASX 200 fell 0.95% to close at 7,625.9, retreating from its all-time high set on Friday. Markets also awaited an interest rate decision from the Reserve Bank of Australia on Tuesday.

In contrast, Japan’s Nikkei 225 climbed 0.54% to end at 36,354.16, while the broader Topix rose 0.67% to close at 2,556.71.

China, Taiwan, South Korea, Singapore, and Hong Kong will all see shortened trading weeks as the Lunar New Year approaches.

In the U.S., the S&P 500 notched a fresh record high on Friday as quarterly results from technology companies including Facebook-parent Meta topped expectations and the January jobs report came in much better than expected.

The broad market index added 1.1% to close at 4,958.61, above its previous record close of 4,927.93 reached on Monday.

The Dow Jones Industrial Average added 0.4% to also set a new record close of 38,654.42, while the Nasdaq Composite climbed 1.7%.

Source from CNBC : https://www.cnbc.com/2024/02/05/asia-markets.html