BANGKOK– Stocks were mixed on Tuesday in Asia, where Chinese shares rose after a government investment fund said it would step up stock purchases and a report said leader Xi Jinping would meet with officials to discuss markets.
Oil prices rose and US futures were mixed.
Bloomberg reported that Xi would be briefed by officials on the markets, underscoring the ruling Communist Party’s concerns about a slump that has wiped out trillions of dollars in market value in recent years. Citing unnamed officials, it said the timing of the briefing was uncertain. The report could not be confirmed.
But markets jumped after the release, with Hong Kong’s Hang Seng rising 4% to 16,133.60 in a rally led by tech stocks such as e-commerce giant Alibaba, which gained 7.7%, and JD.com, which rose 7.7%. Online food delivery company Meituan rose 6.5%.
The Shanghai Composite index rose 3.2% to 2,789.49. In China’s smaller main market, the Shenzhen Component Index rose 6.2%, while the CSI 1000, an exchange-traded fund often used to track so-called “snowball derivatives,” investment products that can deliver big profits but also can result in exaggerated losses, claimed 7%.
The latest salvo in the government’s campaign to prop up sagging markets came with a pledge from China’s Central Huijin Investment, a sovereign wealth fund that owns China’s state-owned banks and other large government-controlled companies, to expand its purchases of stock index funds.
The fund periodically steps up its purchases of shares in major state-owned banks and other companies to counter heavy selling pressure in Chinese markets. On Monday, benchmarks in Shanghai and the smaller market in Shenzhen swung between small gains and big losses, while share prices of state-owned banks and other major companies rose.
Elsewhere in Asia, Tokyo’s Nikkei 225 index fell 0.5% to 36,160.66 and South Korea’s Kospi lost 0.6% to 2,576.20.
The Australian S&The P/ASX 200 lost 0.6% to 7,581.60
In Bangkok, the SET rose 1%, while India’s Sensex rose 0.5%.
Stocks fell on Wall Street on Monday as data showed the economy remains strong, which could delay the rate cuts investors are counting on.
The S&The P500 fell 0.3% to 4,942.81 from Friday’s all-time high. The Dow Jones Industrial Average fell 0.7% to 38,380.12, and the Nasdaq composite fell 0.2% to 15,597.68.
Stocks generally felt pressure from another jump in bond yields, which rose as traders absorbed the message that the Federal Reserve won’t start cutting key rates as soon as they had hoped.
The Fed has raised the federal funds rate to its highest level since 2001 to reduce high inflation. High interest rates deliberately slow the economy by making borrowing more expensive and hurting investment prices.
Federal Reserve Chairman Jerome Powell said again in an interview on Sunday that the Fed could cut rates three times this year because inflation has cooled. But he also reiterated in the interview on “60 Minutes” that it is unlikely the Fed will start in March, as many traders had previously hoped.
The yield on 10-year government bonds stood at 4.15% early Tuesday, compared to 4.16% at the end of Monday.
A report shows that the US services sector is more robust than economists expected, led by health care and social assistance, according to the Institute for Supply Management
Such signals could lead the Fed to pause longer before cutting rates, as they could continue to put upward pressure on inflation.
But there is also upside for equities as the US economy surges through concerns about a possible recession. Economic strength should drive companies’ earnings growth, which is the other lever that determines where stock prices go in the long term.
In other trading Tuesday, U.S. benchmark crude gained 26 cents to $73.04 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 29 cents to $78.28 a barrel.
The dollar fell from 148.68 yen to 148.60 Japanese yen. The euro rose from $1.0743 to $1.0757.
