Asia stocks steady after Wall St rally

HONG KONG – Asia stocks held steady on Monday, despite a record-smashing lead from Wall Street, ahead of a week of major monetary policy announcements around the world.

In Hong Kong, the Hang Seng Index was down 0.17 percent at the close, while Tokyo’s benchmark Nikkei 225 index closed up by 0.71 percent.

Friday’s gains on Wall Street, where the S&P 500 piled on more than 0.9 percent to finish at 4,712.02, eclipsed a record from last month — and came despite figures showing the consumer price index jumped 6.8 percent in November.

The rise in inflation suggests a tapering in the US Federal Reserve’s ultra-loose monetary policy will come sooner rather than later — a change that markets have been nervously awaiting for months.

Fed chair Jerome Powell — who will update the markets this week following a two-day policy meeting — had already signalled plans to accelerate the tapering of stimulus payments. Many analysts expect the central bank to hike interest rates at least twice in 2022.

But traders took the data in their stride, in part because the inflation was largely expected.

In Asia Monday, Singapore, Seoul and Taipei were marginally down, with Manila, Jakarta and Shanghai slightly up.

Wellington rose more than one percent.

In Tokyo, “the market is looking at the Bank of Japan’s Tankan” quarterly business survey, released 10 minutes before the opening bell, said senior market analyst Toshiyuki Kanayama of Monex.

The latest survey showed Japan’s major manufacturers remain cautious about the economy’s trajectory, with business sentiment flat for the quarter as concerns about the pandemic linger.

Some investors may take a wait-and-see attitude ahead of the Fed meeting, analysts added.

“Global equities had a solid run last week and we’ll see if the goodwill lasts into what is a behemoth when it comes to event risk,” Chris Weston, head of research with Pepperstone Financial, wrote in a note.

The Fed, along with the latest on the Omicron variant of the coronavirus, should dictate sentiment, he added.

Michael Hewson, chief market analyst at CMC Markets UK, added: “For now, equity markets appear to be adopting a glass half full approach to recent events, even as US inflation came in at its highest levels in 39 years on Friday, amidst a backdrop of increasing concern that central banks are massively behind the curve.

“Nonetheless as we look ahead to a new week, with the likes of the Federal Reserve, Bank of Japan, Bank of England and European Central Bank all due to deliberate on policy, European equity markets look set to start the week on the front foot.”

At the open in Europe, the main markets were largely steady.

London’s benchmark FTSE 100 index opened flat at 7,292.85 points, while Frankfurt’s DAX index gained 0.2 percent and the Paris CAC 40 was almost unchanged at 6,992.14.

Elsewhere, Chinese artificial intelligence start-up SenseTime said it was postponing a planned $767 million initial public offering in Hong Kong after it was blacklisted by the United States over human rights concerns in Xinjiang.

It filed a statement with the Hong Kong stock exchange saying it would postpone its listing “to safeguard the interests of the potential investors” as they weigh the impact of being placed on the blacklist.

– Key figures around 0830 GMT –

Tokyo – Nikkei 225: UP 0.71 percent at 28,640.49 (close)

Hong Kong – Hang Seng Index: DOWN 0.17 percent at 23,954.58 (close)

Shanghai – Composite: DOWN 0.40 percent at 3,681.08 (close)

New York – Dow: UP 0.6 percent at 35,970.99 (close)

London – FTSE 100: FLAT at 7,292.85

Euro/dollar: DOWN at $1.1285 from $1.1304

Pound/dollar: UP at $1.3232 from $1.3225

Euro/pound: FLAT at 85.29 pence from 85.29 pence

Dollar/yen: UP at 113.65 from 113.37 yen

West Texas Intermediate: UP 0.89 percent at $72.31 per barrel

Brent North Sea crude: UP 0.76 percent at $75.72 per barrel

— Bloomberg News contributed to this report —