Oil Rises on Mideast Attacks, Asia Stocks Advance: Markets Wrap

(Bloomberg) — Stocks in Asia advanced after China’s latest measures to bolster its equity market and the property sector injected a note of optimism. Energy shares were boosted by higher oil prices. 

Property shares climbed in Hong Kong after the southern city of Guangzhou eased home-buying restrictions. China’s securities regulator said on the weekend it will halt the lending of certain shares for short selling from Monday. The latest steps add to measures aiming to arrest a slide in the nation’s stocks which has seen the MSCI China Index tumble about 60% from a February 2021 peak.

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“The very poor sentiment leading to this could potentially open the door for some technical rebound” in Chinese shares, said Homin Lee, a senior macro strategist at Lombard Odier, speaking on Bloomberg Television. “We’re slightly more cautious because what’s really needed is a change in the inflation outlook for the country and the overall sentiment in the private sector.”

Mainland China shares failed to match gains in their Hong Kong peers, amid concern over the Biden administration’s proposal requiring US cloud firms to actively reveal foreign clients developing AI applications. The proposal — scheduled for release Monday — risks adding to tensions between Washington and Beijing after some US lawmakers last week proposed legislation targeting Chinese biotech companies. 

Shares of China Evergrande Group were suspended in Hong Kong after dropping nearly 21% when a court ordered the company to be liquidated.

Japanese equities rose, with commodity-related producers outperforming. US stock futures were little changed as investors weighed risks from the Middle East conflicts at the start of a busy week for the global policy outlook.

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Brent and West Texas Intermediate crude gained for a fourth day, rising to their highest levels since November in intraday trading. The US said Iranian-backed militants killed three service members, with US President Joe Biden pledging to retaliate. Oil climbed on Friday after Houthi rebels attacked a vessel carrying Russian fuel.

The Australian and New Zealand dollars outperformed their Group-of-10 peers on higher commodity prices and as China’s stock-market support measures boosted investor sentiment.

The US dollar and Treasuries were both little changed in Asia. Mixed US economic Friday data spurred concerns the Federal Reserve will signal patience about the pace of interest-rate cuts when it announces its next policy decision on Wednesday. 

This week also brings a slew of key data, from European GDP on Tuesday, to China PMI and Australian inflation on Wednesday, then European inflation and a Bank of England policy decision on Thursday. 

“We think the Fed is likely to reiterate its data-dependent stance and caution that it is willing to exercise patience,” analysts at ANZ Bank Ltd., including Miles Workman, wrote in a report. “The Fed will be cautious about any reacceleration of inflation pressures from above-trend growth and the resilient labor market.”

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Key events this week:

• Australia retail sales, Tuesday
• Eurozone economic confidence, GDP, consumer confidence, Tuesday
• European Central Bank board members Boris Vujcic and Philip Lane speak, Tuesday
• US Conf. Board consumer confidence, Tuesday
• Microsoft Corp., Alphabet Inc. to report earnings, Tuesday
• Australia CPI, Wednesday
• Japan industrial production, retail sales, Wednesday
• China non-manufacturing PMI, manufacturing PMI, Wednesday
• France CPI, Wednesday
• Germany CPI, unemployment, Wednesday
• ECB chief economist Philip Lane speaks, Wednesday
• Fed rate decision, US employment cost index, Wednesday
• Boeing Co. announces earnings, Wednesday
• US Treasury quarterly refunding, in which officials to announce plans for auctions of 3-year notes, 10-year notes and 30-year bonds and other borrowing plans, Wednesday
• Japan PMI, Thursday
• China Caixin manufacturing PMI, Thursday
• Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Thursday
• Bank of England rate decision, Thursday
• ECB Governing Council member Mario Centeno speaks, Thursday
• US ISM Manufacturing, initial jobless claims, Thursday
• Apple Inc., Amazon.com Inc., Meta Platforms Inc. to report earnings, Thursday
• German lawmakers hold final votes on revised 2024 federal budget, Friday
• ECB Governing Council Member Mario Centeno speaks, Friday
• US employment report, University of Michigan consumer sentiment, factory orders, Friday

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Stocks

• S&P 500 futures were little changed as of 1:30 p.m. Tokyo time. The S&P 500 was little changed on Friday
• Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.5%
• Japan’s Topix index rose 1.3%
• Hong Kong’s Hang Seng Index rose 0.9%
• China’s Shanghai Composite Index rose 0.3%
• Australia’s S&P/ASX 200 Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0845
• The Japanese yen was little changed at 148.06 per dollar
• The offshore yuan was little changed at 7.1951 per dollar
• The Australian dollar rose 0.3% to $0.6594

Cryptocurrencies

• Bitcoin rose 0.6% to $42,231.88
• Ether rose 0.2% to $2,268.19

Bonds

• The yield on 10-year Treasuries was little changed at 4.13%
• Japan’s 10-year yield advanced 1.5 basis points to 0.720%
• Australia’s 10-year yield declined three basis points to 4.21%

Commodities

• West Texas Intermediate crude rose 0.6% to $78.49 a barrel
• Spot gold rose 0.4% to $2,026.67 an ounce

This story was produced with the assistance of Bloomberg Automation.

—With assistance from Garfield Reynolds.

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