Jan 24, 2024: On Wednesday, a majority of Asian stocks faced a retreat due to mixed signals from the Bank of Japan, leading to profit-taking in Japanese markets. Conversely, Hong Kong stocks witnessed a sharp rebound, primarily driven by a tech rally fueled by Alibaba Group.
Chinese stocks resumed their downward trend, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes dropping by 0.7% and 0.4%, respectively. These indexes had slightly recovered from their five and four-year lows on Tuesday following reports of a proposed 2 trillion yuan ($278 billion) support package for local stocks by the Chinese government. However, persistent concerns about China’s economic rebound post-COVID continued to weigh on sentiment.
Across broader Asian markets, traders remained cautious about the prolonged U.S. interest rate situation, especially ahead of key economic data releases and significant tech earnings scheduled later in the week. Despite some nervousness, the markets were supported by a series of record-high finishes on Wall Street.
Australia’s ASX 200 exhibited a flat performance, tracking the subdued results of Woodside Energy Ltd, a major oil and gas player, which reported a smaller-than-expected revenue increase in the December quarter. Profit-taking was observed in broader Australian stocks, with the ASX hovering near a record high.
South Korea’s KOSPI experienced a 0.3% decline, while futures for India’s Nifty 50 index hinted at a restrained opening following recent profit-taking in Indian stocks.
Japanese stocks, particularly the Nikkei 225 and TOPIX indexes, faced a 0.7% and 0.5% decline, respectively, leading losses in the region. Investors engaged in profit-taking after these indexes recently reached 34-year highs. Mixed signals from the Bank of Japan added to the uncertainty, as the central bank maintained its ultra-dovish stance while signaling progress towards an eventual end to negative interest rates in Japan.
