Stock markets diverge before key earnings

LONDON: Major stock markets diverged Monday as traders awaited more earnings updates this week from heavyweight companies, including HSBC bank, chip giant Nvidia and retail giant Walmart. Focus this week will be on also minutes from the most recent policy meetings of the US Federal Reserve and European Central Bank for clues on when markets can expect the pair to start cutting interest rates as inflation cools.

On Monday, mainland Chinese stocks were buoyant after Lunar New Year, leading gains in most other Asian markets, as figures showed holiday spending surged past pre-pandemic levels. Hong Kong closed down 1.1 percent, breaking a three-day rally, with analysts saying investors felt uneasy after a decision by China’s central bank to leave a key policy rate unchanged, seen as an attempt to bolster the yuan. Tokyo’s key Nikkei index ended flat. In Europe, Paris and Frankfurt dropped in late morning deals. London steadied, managing to avoid an overall loss as shares in AstraZeneca rallied after the drugs giant had a lung cancer treatment approved in the United States. “The US markets will be closed on Monday in observance of Presidents’ Day... but China is back after a week-long holiday, and we will have earnings from Nvidia in mid-week,” noted Fawad Razaqzada, market analyst at City Index trading group. “Investors have continually ignored the Fed’s consistent pushback against expectations of an early rate cut. Instead, they have chosen to concentrate on mostly stronger earnings and the AI optimism, taking advantage of the bullish momentum to drive stocks higher.