Asian stocks are on the rise as China slows major mortgage rates on Reuters

Author: Andrew Galbraith

SHANGHAI (Reuters) – Asian stock markets broke a five-day low on Thursday, removing European and Wall Street declines overnight as China underlined its different currency and economic framework by lowering benchmark mortgage rates.

Despite a stronger start in Asia, ING analysts said geopolitical risks, especially the chances of Russia invading Ukraine, could continue to weigh on global equities, adding to the pressure of forecasting rate hikes.

“Markets may soon start to consider a higher risk of a conflict between Russia and Ukraine, which is one reason for continuing to sell shares and the fact that the profits of the Treasury are not higher in a single round.”

U.S. President Joe Biden announced on Wednesday that Russia would make a move against Ukraine, saying the full-scale invasion would be a “catastrophe for Russia,” but suggesting that a “small incursion” could have a lower cost.

Expectations that the US Federal Reserve will move faster to raise interest rates in the face of inflation have been particularly hard hit by technology stocks overnight, with the Nasdaq falling more than 1% into the correction territory.

The sell-off also hit bonds on Wednesday, boosting U.S. Treasury yields to two-year highs and leading Germany to a 10-year positive return for the first time since May 2019, as investors pledged to reduce the stimulus for years. coping with rising inflation exacerbated by supply chain disruptions.

“The time has come for you to download, you may want to stop downloading. If the bonds start to pick up a bit, and you saw a slowdown in performance in the US yesterday, I think … maybe we wouldn’t. Get a follow-up today,” said Matt Simpson of Sydney. Senior Market Index Market Analysts.

In stark contrast to the global movement for tighter policies and higher rates, China cut its mortgage rate on Thursday for the first time in almost two years. The move came on Monday following a sudden one-year reduction in the central bank’s one-year medium-term lending rate.

Chinese monetary authorities have said they will take further steps this year to curb growth in the world’s second-largest economy. Data released on Monday showed a weakness in consumption and the real estate sector darkened its outlook, despite a strong headline growth figure.

China’s blue-chip CSI300 index rose 0.7% on Thursday morning and Hong Kong rose more than 1.4%. The rise in Chinese equities boosted MSCI’s broadest Asian stock index outside of Japan, up 0.54%.

Seoul’s Kospik was up 0.1% and Australian shares were down. In Tokyo, there was an increase of 0.17%.

Asia’s modest earnings came after Wall Street investors surpassed strong gains after looking at inflation and rate hikes.

It fell 0.96% and lost 0.97%. It fell 1.15% to more than 10%, confirming the highest correction that closed the November 19 record.

In the Asian session, US yields rose, but remained below the highs of the previous session. The benchmark 10-year yield rose to 1.8485% from the US close of 1.827%, and the two-year policy return touched 1.0449% compared to the 1.025% close to the US.

The upward trend in the Treasury yield kept the dollar under control, which measures the greenback against its six major counterparts by dropping to 95,477, as the commodity currency has benefited from high oil prices.

The dollar was up 0.4%.

The dollar was down 0.08% against the Japanese yen at 114.23 and the euro was up 0.15% at $ 1.1356.

Oil prices, which hit their highest levels since Wednesday in 2014, fell sharply due to strong demand and short-term supply disruptions. The global benchmark was down 0.84% ​​at $ 87.70 per barrel and down 1.1% to $ 86 per barrel. [O/R]

The gold continued to rise after the best three-month session a day earlier. It rose 0.08% to $ 1,841.12 an ounce.