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HomeLatestAsian Stocks Display Mixed Performance; Nikkei Rebounds, China Faces Property Market Woes
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Asian Stocks Display Mixed Performance; Nikkei Rebounds, China Faces Property Market Woes

The Asian stock markets presented a mixed picture on Monday, with Japanese markets rebounding from significant losses observed last week, while Chinese stocks experienced a decline amid renewed apprehensions concerning the country’s property market.

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Across broader Asian markets, trading occurred within a narrow range, reflecting lingering fragility in sentiment amidst diminishing confidence regarding potential early interest rate cuts in the United States. In Asian trade, U.S. stock futures showed marginal gains, with attention shifting towards forthcoming consumer price index data and the release of minutes from the Federal Reserve’s March meeting.

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Last week, diminishing expectations of early interest rate cuts in the U.S. had adversely impacted global stock markets. The release of robust payrolls data on Friday further reinforced the ongoing strength in the U.S. labor market.

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Nikkei 225 Rebounds Amidst Steep Weekly Losses

Japanese equities emerged as the top performers of the day, witnessing the Nikkei 225 surging by 1.6%, while the broader TOPIX index added 1.2%. Both indices benefited from bargain hunting activities following their worst weekly performance since December 2022, with losses ranging between 2.3% and 3.5%.

The downturn in Japanese markets primarily stemmed from a resurgence in the yen, prompted by repeated government warnings regarding potential interventions in currency markets to bolster the currency’s value. However, the yen exhibited weakness on Monday following the release of Japanese wage growth data for February, which met expectations. The prospect of rising wages holds significance for the Bank of Japan’s consideration of further interest rate hikes, with substantial increases anticipated in the upcoming months. Consequently, additional rate hikes could act as a limiting factor for Japanese equities, with expectations suggesting a potential stalling of the Nikkei around the 40,000-point mark.

Chinese Stocks Grapple with Property Market Concerns

In China, the benchmark Shanghai Shenzhen CSI 300 and Shanghai Composite indexes each experienced a 0.7% decline upon resumption of trading after an extended weekend. Similarly, Hong Kong’s Hang Seng index witnessed a decrease of approximately 0.4%.

The downturn in Chinese markets was attributed to renewed apprehensions surrounding the property sector, following a demand for liquidation placed on defaulted developer Shimao Group by a prominent creditor. This development adds to the growing list of Chinese developers facing similar scenarios, including Evergrande Group, which was recently ordered to liquidate by a Hong Kong court, and Country Garden, which encountered a winding-up petition. Such instances have reignited concerns regarding a prolonged downturn in China’s property market, posing a threat to the broader economic recovery in the country.

Other Asian Markets Display Limited Movement

Elsewhere in Asia, other markets exhibited minimal movement on Monday, following some losses observed during the previous week. Anticipation regarding additional cues on U.S. interest rates largely dictated sentiment.

Australia’s ASX 200 index recorded a 0.2% rise, while South Korea’s KOSPI index added 0.1%. Futures for India’s Nifty 50 index hinted at a mildly positive opening, following the index’s attainment of record peaks during the preceding week.

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