· Asia-Pacific markets pare gains ahead of Fed meeting; Rakuten jumps 24%
Asia-Pacific lost momentum on Monday as major indexes pared some of their gains while others struggled to advance. Investors are looking ahead to this week’s Federal Reserve meeting stateside.
Australian shares wavered as the benchmark ASX 200 finished up 0.09% at 6,773.00. The energy sector gained 0.79% while the materials sector slipped 0.61%. The heavily-weighted financials subindex rose 0.26%.
Japanese markets rose, where the Nikkei 225 notched up a 0.17% gain to 29,766.97 while the Topix index added 0.91% to 1,968.73.
Tech giant Rakuten jumped 24.1% after the company said Friday that it will issue new shares to raise $2.2 billion in capital to compete with its U.S. rivals. Japan Post is expected to take a 8.3% stake in Rakuten, while China’s Tencent will take 3.6% and U.S. retail giant Walmart takes a 0.9% stake.
In South Korea, the Kospi slipped 0.28% to 3,045.71 while Hong Kong’s Hang Seng index rose 0.12% in late-afternoon trade.
Chinese mainland shares struggled for gains: The Shanghai composite fell 0.96% to 3,419.95 while the Shenzhen component declined 2.71% to 13,520.07.
A year since the coronavirus pandemic hit, China’s young people are still finding it hard to land jobs, according to data from the National Bureau of Statistics. The unemployment rate for those aged between 16 and 24 was significantly higher than the national urban jobless rate.
Indian shares also declined — the Nifty 50 was down 1.77% and the Sensex fell 1.75% in afternoon trade.
In Singapore, the Straits Times index rose 0.17% as of 3:32 p.m. local time. Shares of Singapore Airlines jumped 5.09% following reports that the city-state is in talks to set up an air travel bubble with Australia.
· Xiaomi shares spike 10% after U.S. judge blocks Trump-era restrictions on the Chinese phone maker
Shares of Xiaomi jumped Monday after a U.S. judge temporarily blocked a move by former President Donald Trump’s administration to bar Americans from investing in the Chinese smartphone maker.
Shares of Xiaomi surged more than 10% in early trade, but have since pared their gains. The stock was still up about 8% in early afternoon trade.
In January, the Trump administration designated Xiaomi as one of several “Communist Chinese military companies” or CCMC.
· Chinese liquor stock that drew comparisons to bitcoin is clinging to 2020 gains
The biggest stock in the mainland Chinese “A share” market is a liquor company that analysts are betting on for the long term, despite its plunge in the last month.
Kweichow Moutai sells “baijiu” which has an alcohol content of about 43% to 53% and can cost about a few hundred U.S. dollars per bottle. Baijiu — literally “white spirits” — is a staple at Chinese business and government dinners for forging relationships and deals.
The stock was down about 1% year-to-date as of Monday morning, holding 2020′s gains of roughly 70%.
Earlier this year, the stock’s rapid surge in price drew internet memes comparing it to the GDP of Chinese cities and bitcoin’s high-flying price. Cryptocurrency bitcoin has surged more than 80% this year to above $60,000.
Moutai’s share price had climbed 30% from Dec. 31 to a record high just before the Lunar New Year in mid-February, when it achieved a market value of $500 billion. That’s been shaved by over $100 billion in the weeks since, as shares fell more than 20% amid a broad sell-off in Chinese stocks.
But Kweichow Moutai still has a bigger valuation than any other mainland A share stock, including the giant ICBC bank, according to Wind Information.
· Singapore and Australia airline stocks surge after talks on air travel bubble
Singapore Airlines shares jumped Monday after the city-state confirmed it was in talks with Australia to set up an air travel bubble.
Singapore Airlines shares were up 5.47% in afternoon trade, after surging as much as 8.49% earlier in the day. Airline-related shares such as SATS, a subsidiary company that provides in-flight catering, was up 3.43% while SIA Engineering advanced 4.65%.
Australian flag carrier Qantas gained 3.77% at market close.
· European stocks advance with Fed meeting in focus; Danone up 4.5% on CEO ousting
European stocks traded higher Monday as global investors focus on this week’s upcoming Federal Reserve meeting.
The pan-European Stoxx 600 climbed 0.7% in early trade, with travel and leisure stocks jumping 2.4% to lead gains as all sectors and major bourses entered positive territory.
European markets are starting the week on a positive note ahead of this week’s Federal Reserve meeting stateside, bucking a more mixed trend in Asia-Pacific markets on Monday.
The Federal Open Market Committee is due to meet on March 16 and 17 and some analysts expect the U.S. central bank to revise up its GDP forecast, following a $1.9 trillion fiscal stimulus package that will send direct payments of up to $1,400 to most Americans.
The FOMC following Tuesday and Wednesday’s Federal Open Market Committee meeting will also deliver its decision on interest rates. The bond market will likely take its cues from the Federal Reserve in the coming week.
Bond pros are also watching to see whether Fed officials will tweak their interest rate outlook, which now does not include any rate hikes through 2023.
· Dow futures inch higher ahead of Monday’s market open
U.S. stock futures were mixed early Monday morning and pointed to a cautious open later in the day. That followed last week’s rally that led the Dow and S&P 500 to record highs.
Dow futures rose 50 points. S&P 500 futures were flat while Nasdaq 100 futures slipped.
Stocks rose last week with the Dow Jones Industrial Average rising 4% and the S&P 500 gaining 2.6%. The S&P 500 and the Dow both closed at record highs Friday.
The Nasdaq Composite advanced 3% last week, despite a sell-off on Friday spurred by rising interest rates. The jump in bond yields has challenged growth stocks in recent weeks and sent investors into cyclical pockets of the market. The Nasdaq is up less than 1% this month, while the Dow and S&P are up 6% and 3.5%, respectively.
Reference: CNBC, Reuters
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