Asia-Pacific stock markets were mixed on Monday as concerns over continued monetary tightening by the Federal Reserve remained, while investors in China weighed a decision to cut lending rates to stem the country’s economic slowdown.
In particular, global investor interest is turning this week to the crucial meeting of central bankers in Jackson Hole, awaiting signals on the Fed’s imminent stance on the size of the Federal Reserve’s interest rate hike.
“Recent comments from Fed officials send the message for more rate hikes as the battle against inflation is not yet won,” National Australia Bank analyst Rodrigo Catril said in a note.
However, according to the estimates of economists in a Reuters poll, the US Federal Reserve will raise interest rates by 50 basis points in September, against expectations of peak inflation, but also escalating concerns about an economic downturn. Economists have argued that the risks to the economy lie in the direction of a higher peak in inflationary pressures.
In addition, China cut lending rates on Monday, reinforcing easing measures announced last week as Beijing steps up efforts to boost credit demand in an economy battered by the property crisis and resurgence of coronavirus cases. The one-year lending rate (LPR) fell 5 basis points to 3.65% at the central bank’s monthly rate, while the five-year LPR fell by a bigger margin, down 15 basis points to 4.30%.
“We believe the asymmetric reductions are aimed at supporting long-term lending, and mortgages in particular, as overall loan supply remains strong while demand remains subdued,” Goldman Sachs analysts said in a note.
In this climate, markets in mainland China are moving higher, with the Shanghai Composite adding 0.55% and the Shenzhen 0.9%. In the Hong Kong the Hang Seng is marginally up 0.2%.
Negative signs in the rest of Asia, since at Japan the Nikkei 225 is moving away from the day’s lows but remains in negative territory at -0.57% and the Topix is ​​losing 0.23%.
At South KoreaKospi down 1% and Kosdaq down 1.4%.
The S&P/ASX 200 index at Australia recorded a drop of 0.9%.
Its broadest index MSCI for Asia-Pacific shares outside Japan slipped 0.48%.
Meanwhile, the stronger inflationary pressures recently came as a surprise to the central bank of New Zealandand was the reason why the cash rate will rise to 4%according to monetary policy committee member Adam Richardson.
Source: Capital
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