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JOHANNESBURG - Markets mostly rose yesterday over murmurs that the US Federal Reserve may loosen its monetary tightening but stocks in Hong Kong and China fell after Beijing announced its lowest economic growth target in decades.
Traders in Tokyo appeared bullish about positive news flowing in from the United States where Wall Street had rallied on Friday. An end-of-week slide in treasury bond yields fortified beliefs that the Federal Reserve was nearing the end of its rate-hiking cycle.
The Nikkei 225 jumped over one percent in early trade, with gains posted in Taipei, Seoul, Jakarta, and Sydney.
Federal Reserve Chair Jerome Powell is set to discuss monetary policy before the House and Senate committees today, proceedings that will be watched closely by investors angling for positive interest rate news.
“Most important will be whether the chair takes the opportunity to express a preference for sticking with a 25bp (basis points) hike in March or if he leaves the door ajar for returning to a faster pace this month,” said Stephen Innes of SPI Asset Management.
“If Powell does not slam the door shut on the potential for a larger hike, markets could put substantially more weight on a 50bp hike at the March meeting in response to last month’s hotter data.” But stocks in Hong Kong and Mainland China swam against the tide after uninspiring economic news from Beijing.
Hong Kong’s Hang Seng Index sunk around half a per cent and both Shanghai and Shenzhen were also down. Outgoing Premier Li Keqiang announced an ‘around five percent’ growth figure on Sunday.