Market Analytics and Considerations
Key Notes
After the government announced additional reform programs, the majority of Asian stock markets rose on Monday, with Chinese indices paving the way, although domestic stocks in Japan dropped on concerns that the Bank of Japan might take further aggressive action.
China’s top companies The Shanghai Shenzhen CSI 300 index had the best display in Asia, rising 2percentage points to almost a 5 top following additional liquidity injections through into banking sector by the People’s Bank of China. The action is taken in preparation of the lunar new year vacation, when it is anticipated that liquidity will grow.
Investors interpreted the liquidity boost as an indication that now the Chinese government planned to pursue extra spending initiatives as the nation battles with its deadliest COVID-19 epidemic to date.
After the majority of anti-COVID restrictions were relaxed this year, and China opened its frontiers the other week, it is also anticipated that the Chinese economy will gradually rebound this year. Since Dec, local equities have been soaring on that belief.
While Hong Kong’s the Hang Seng increased by 0.7% to a 6 peak, the Shanghai Composite index increased by 1.6%.
Additionally, markets vulnerable to China increased. Although Australia’s ASX 200 index increased by 0.8 percent the Taiwan Weighted index increased by 0.6 percent.
In contrast, Japan’s Nikkei 225 index dropped 1.2percentage points as local bond yields rose advance of this week’s Bank of Japan cabinet meeting. As domestic inflation surged to over forty year peak levels in Dec, pressure is growing on the central bank to tightening policies.
Now the focus is on a flood of important economic statistics that is due later this week. While market anticipate a recovery in Economic growth in the year and, investors remain apprehensive about a downturn in other big economies, especially as the implications of a strong tighter of financial regulation by 2022 start to be apparent.
Markets are focusing on 4th corporate quarterly earnings to determine whether declining economic indicators have an impact on the financial performance of large corporations.
