Asian Stocks Rise as China Rebounds on Policy Help: Markets Wrap

This content was published on November 18, 2024 - 05:40

4 minutes

(Bloomberg) — Asian shares edged higher, following a rally in heavyweight Samsung Electronics Co. Ltd. and gains in Chinese stocks on fresh signs of policy support.

A key gauge of the region’s equities rose 0.2%, aided by Samsung Electronics’ jump after South Korea’s biggest firm announced a surprise stock buyback plan. Shares in Hong Kong and mainland China also advanced after the country’s securities regulator urged listed companies to boost returns on their stocks.

The brighter mood in Korea and China helped offset weakness in neighboring markets like Japan and Taiwan, where concerns lingered about Donald Trump’s potentially inflationary economic policies and Friday’s upbeat US retail sales data that reduced expectations for the Federal Reserve to cut interest rates.

US stock futures also rose, after the S&P 500 slid 1.3% on Friday to erase more than half of its gains following the US election.

“Investors expect Chinese companies will try their best to boost market cap, fund flows into related stocks,” said Kenny Wen, head of investment strategy at KGI Asia Ltd. “However, it may only provide short term sentiment support as stock prices eventually are determined by fundamentals.”

The Bloomberg dollar index was steady. The yen slipped after Bank of Japan Governor Kazuo Ueda said the timing of the central bank’s next policy adjustment will depend on the economy and prices. The BOJ is scheduled to meet on Dec. 18-19.

In corporate news, Alibaba Group Holding Ltd. is proposing to sell dollar and yuan bonds to pay back offshore debt and buy back shares, following the Chinese tech conglomerate’s issuance of a record convertible bond offering earlier this year.

As for commodities, oil rebounded after a weekly decline on concerns over plentiful supply and weaker demand from top crude importer China. Gold advanced after suffering its worst weekly drop since 2021, as the dollar eased and traders weighed the outlook for Fed rate cuts.

Elsewhere this week, China’s banks are expected to keep their loan prime rates unchanged after a cut in October. Bank Indonesia will deliver a policy decision as the rupiah neared 16,000 per dollar on Friday, a key psychological level for a central bank focused on currency stability.

UK and eurozone inflation readings are due which will help gauge the outlook for Bank of England and European Central Bank policy with a swath of officials from the respective institutions also due to speak. Nvidia’s results may test the sustainability of AI-led stock gains.

Key events this week:

BOJ Governor Kazuo Ueda speaks, Monday
Group of 20 Summit in Brazil begins, Monday
European Union foreign ministers meet in Brussels, Monday
RBA meeting minutes, Tuesday
Eurozone CPI, Tuesday
Canada CPI, Tuesday
China loan prime rates, Wednesday
Indonesia rate decision, Wednesday
South Africa retail sales, CPI, Wednesday
UK CPI, Wednesday
Nvidia earnings, Wednesday
ECB President Christine Lagarde and Vice President Luis De Guindos speak, Wednesday
ECB issues financial stability review, Wednesday
Fed Governor Lisa Cook, Fed Governor Michelle Bowman speak, Wednesday
BOE Deputy Governor Dave Ramsden speaks, Wednesday
RBA Governor Michele Bullock speaks, Thursday
Japan CPI, Friday
India HSBC Manufacturing & Services PMI, Friday
Eurozone HCOB Manufacturing & Services PMI, Friday
UK retail sales, S&P Global Manufacturing & Services PMI, Friday
US University of Michigan consumer sentiment, S&P Global Manufacturing & Services PMI, Friday