Tokyo and Sydney rose while Hong Kong, Shanghai and Bangkok slid following a rise in U.S. futures Monday amid oil’s decline
Shares were mixed in Asia on Monday
after China's central bank cut a key interest rate and Japan reported its
economy expanded at a faster pace in the last quarter.
Tokyo and Sydney advanced while
Hong Kong, Shanghai and Bangkok fell. U.S. futures edged higher Monday while
oil prices declined.
The People's Bank of China cut
its rate on a one-year loan to 2.75% from 2.85% and injected an extra 400
billion yuan ($60 billion) in lending markets after government data showed July
factory output and retail sales weakened.
Beijing is aiming to shore up
sagging economic growth at a politically sensitive time when President Xi
Jinping is believed to be trying to extend his hold on power.
The ruling Communist Party
effectively acknowledged last month
itcan't hit this year's official 5.5% growth target after anti-virus curbs
disrupted trade, manufacturing and consumer spending. A crackdown on corporate
debt has caused activity in the vast real estate industry to plunge.
Thai recovery
Meanwhile, Japan reported its
economy expanded at a 2.2% rate in April-June from a year earlier, as
consumerspending rebounded with the lifting of COVID-19 restrictions.
Tokyo's Nikkei 225 index added 1%
to 28,830.90 and the S&P/ASX 200 in Sydney climbed 0.4% to 7,061.81. The
Shanghai Composite index edged 0.1% lower to 3,274.19, while Hong Kong's Hang
Seng index gave up 0.2% to 20,135.75.
South Korean markets were closed
for a holiday.
Bangkok's SET index edged 0.1%
lower. The Thai government reported the economy expanded at a 0.7% quarterly
pace in April-June, slowing from 1.1% growth in the first quarter of the year.
Tourism has rebounded after two
years of tight controls to fight COVID-19, but only to about a quarter of the
pre-pandemic level.
Broad rally
"The outlook for the rest of
the year will depend in large part on how quickly tourism recovers,"
Gareth Leather of Capital Economics said in a commentary.
On Friday, Wall
Street capped a choppy week of trading with a broad rally, as the S&P
500 notched its fourth consecutive weekly gain.
The benchmark index closed 1.7%
higher, at 4,280.15, for a 3.3% weekly gain. The S&P 500 hadn't posted such
a good stretch since November.
The Dow Jones Industrial Average
rose 1.3% to 33,761.05, while the Nasdaq gained 2.1% to 13,047.19. The Russell
2000 index of smaller companies added 2.1% to 2,016.62.
Major indexes got a big bump on
Wednesday after a report showed that inflation cooled more than expected last
month. Another report on Thursday showed inflation at the wholesale level also
slowed more than expected.
Aggressive rate hikes
They raised hopes among investors
that inflation may be close to a peak and that the Federal Reserve could ease
off on interest rate hikes, its main tool for fighting inflation.
The aggressive
pace of rate hikes has investors worried that the Fed could steer the
economy into a recession.
The yield on the 10-year Treasury
fell to 2.84% from 2.88% late Thursday. It remains below the two-year yield.
inversion of the expectation that borrowing money for a longer period
should cost more than a shorter period. When investors demand a higher return
for a short term like the 2-year than a longer one like 10 years, it's viewed
by some investors as a reliable signal of a pending recession. The economy has
contracted for two consecutive quarters.
This week, the Commerce Department
releases its retail sales report for July and retail giant Walmart reports its
latest financial results.
Home sales outlook
Investors can also assess the
health of the housing market when they get a report on home sales for July and
the latest earnings from Home Depot.
In other trading Monday, U.S.
oil shed 82 cents to $91.27 per barrel in electronic trading on the New
York Mercantile Exchange. It lost $2.25 per barrel on Friday.
Brent crude oil, the basis for
pricing for international trading, gave up 83 cents to $97.32 per barrel.
The U.S. dollar slipped to 133.28
Japanese yen from 133.43 yen. The euro weakened to $1.0249 from $1.0261.
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