The Asian stock markets were mostly higher on Monday, as investors awaited the U.S. inflation data for December and looked ahead to Japan’s economic recovery. The Nikkei 225 index rose 0.27% to close at 33,377.42, its highest level since March 1990. The broader Topix index also hit a 33-year high of 3,327.64. The futures contracts for both indexes were pointing to further gains in the coming session.
Japan’s economic performance has been boosted by the rollout of vaccines, the easing of lockdowns, and the government’s fiscal stimulus measures. The country’s exports have also rebounded from a slump in October due to supply chain disruptions and global chip shortages. However, some analysts warn that Japan still faces challenges such as labor shortages, rising energy costs, and geopolitical tensions with China.
Bank of Korea holds interest rates steady for eighth straight meeting
The Bank of Korea (BOK) kept its benchmark lending rate unchanged at 3.5% on Thursday, as widely expected by economists. This was the eighth consecutive meeting that the BOK maintained its policy stance since June 2023. The BOK said it will continue to monitor the economic situation closely and adjust its policy accordingly.
The BOK has been cautious about raising interest rates amid signs of slowing growth and rising inflation in South Korea. The country’s gross domestic product (GDP) grew by an annualized rate of 4.8% in the third quarter of 2023, down from a revised 5.4% in the previous quarter. The consumer price index (CPI) rose by an annualized rate of 2.9% in November, up from a revised 2.7% in October.
Australia shares rebound from losses ahead of trade data
The Australian shares started the day higher on Monday, recovering from losses on Wednesday amid concerns over China’s regulatory crackdown on tech companies. The S&P/ASX 200 index gained 0.31%, or 14 points, to finish at 7,447.90 points. It was within striking distance of its all-time closing high of 7,454 points reached on Friday.
The Australian economy is expected to post strong growth in November after a sharp contraction in October due to supply bottlenecks and lockdowns caused by a new coronavirus variant. However, some analysts warn that Australia still faces risks such as rising energy prices, labor shortages, and trade tensions with China.
Hong Kong stocks lead losses amid China shadow bank filing
The Hong Kong stocks plunged over 2% on Monday, dragged by healthcare stocks after a Chinese shadow bank filed for bankruptcy liquidation late Friday. Zhongzhi Enterprise Group was one of China’s largest non-bank lenders that had issued bonds worth over $10 billion through offshore markets. It said it had defaulted on its debt obligations due to liquidity problems caused by regulatory actions against other shadow banks.
The Hang Seng index fell by more than half a percent to close at 16,097.34 points, its lowest level since June last year. The index was also weighed down by weakness in mainland China’s markets after weak manufacturing data showed that China’s factory activity contracted for the first time since February this year in December.