On Monday, shares in Asia-Pacific remained mixed, as investors were keeping an eye on the reaction of the market to the announcement of the latest benchmark rates in China.
Losses in the Markets
The losses in the major markets of the region were led by the Kospi index in South Korea that shed 2.04% and closed at 2,391.03. This was because shares of chipmaker SK Hynix and industry giant Samsung Electronics had both recorded a decline of 2%.
A decline was also recorded in mainland China’s Shanghai Composite, as it closed at 3,315.43. There was a 1.26% gain in the Shenzhen Component, which reached 12,487.13.
No Changes in Rates
On Monday, China decided to leave rates unchanged for both one year and five year loans. This was in line with expectations that the authorities will not make any changes in the rates. Market analysts said that finding a place to hide had become difficult because both the bond prices and equity markets are moving. Traditionally, bond and equities have acted as a hedge against each other, but they now move in tandem.
Just before the US Federal Reserve announced its biggest rate hike after 1994, the 10-year US Treasury government bond yields had reached their highest level in over 11 years. They later came down from those levels and were trading in the afternoon at 3.2313%.
The US Markets remained closed on Monday due to a holiday. Last week, the S&P 500 had its worst week since 2020, with investors grappling with worries of a recession because central banks like the Fed are set to hike interest rates in the future. Analysts said that global economic worries were going to get worse and the next few months are likely going to be quite tough from an economic perspective. Easing supply chain problems can offer some hope.
Other Asian Markets
There was a 0.42% rise in the Hang Sheng index in Hong Kong, which closed at 21,163.91. There was a 1.32% gain in the life insurance company AIA. There was a 6.68% decline in the shares of Netease, after the company announced that there was going to be a delay in the release of its video game. Diablo Immortal is a highly anticipated game and it had been expected to launch soon.
There was also a 0.1% decline in the shares of Hong Kong-listed Alibaba. This was after reports that China had accepted the application of Ant Group for forming a financial holding company. This has revived hopes that the Alibaba-affiliate may go for a public listing.
A decline of 0.74% was also recorded in Japan’s Nikkei 225 index, which was lower at 25,771.22. A 0.92% fall in the Topix index was also recorded, which brought it to 1,818.94. As for the Australian S&P/ASX 200 index, it recorded declines of 0.64% and was down to 6,433.40. The MSCI’s index of Asia-Pacific shares excluding Japan also recorded a dip of 0.15%. Oil prices had also fallen during Asia trading hours.