Stock markets mostly lower on profit-taking

Major Asian and European stock markets mostly retreated Monday, with traders banking profits after last week’s rally. Gains still appeared, however, with Tokyo’s key Nikkei index closing at a fresh all-time high, after Friday beating a record that had stood since 1989. Two of the three main US indices also hit record peaks on Friday.

Last week’s strong gains were fuelled by stellar results from US technology titan Nvidia, a bellwether for artificial intelligence. Investors were looking ahead to the Federal Reserve’s preferred measure of inflation, due Thursday, in the hope of gaining a clearer handle on when the US central bank would start cutting interest rates amid cooling inflation.

Following publication of the US Personal Consumption Expenditure (PCE) price index, focus will turn to Chinese manufacturing data due Friday. “All eyes are on this week’s PCE release,” Harry Murphy Cruise from Moody’s Analytics told AFP. “For Asian markets, a higher print — combined with the Fed’s fear of easing too early — could see rate cuts delayed.”

China’s economy is in the doldrums and losses in Shanghai Monday came despite Beijing saying it wanted to boost sales of cars, appliances and other consumer products in “piecemeal incentives to stimulate the economy”, noted Rodrigo Catril, senior currencies strategist at National Australia Bank.

Cruise added that “the property market’s woes have worsened, and manufacturers continue to sit on the sidelines”. Government interventions have stabilized the market, with Chinese stocks rebounding from early February lows. But underlying weakness means “investors are crying out for larger economic supports to be rolled out”, Cruise said.

Market players are watching to see if extra spending and an ambitious growth target will be announced in March to help China’s economy gain momentum through the year, according to Cruise.

Elsewhere on Monday, oil prices extended losses. “Lack of demand (for crude) remains a concern,” Catril said. —AFP