Stocks, dollar diverge as oil drops

AFP , Tuesday 23 Jan 2024

Stock markets diverged and oil prices retreated Tuesday as Chinese officials reportedly mull action to bolster its flagging economy.

Gold bullion
File Photo: Gold bullion bars are pictured after being inspected and polished at the ABC Refinery in Sydney. AFP

 

Hong Kong led a rally for Asian equities, while Europe's main indices dipped, failing to benefit from another record finish Monday on Wall Street.

Oil prices fell back as markets continued to closely monitor fallout from the Israeli war on Gaza, while the dollar was mixed versus main rivals.

"Positive sentiment appears to be clinging on, following continued optimism emanating from Wall Street about the prospects for a softer landing for the US economy," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Analysts are expecting the Federal Reserve to start cutting interest rates from March, while the European Central Bank, which holds a policy meeting Thursday, could begin easing this summer, its president Christine Lagarde said last week.

In Asia, the Hong Kong stock market closed up 2.6 percent and Shanghai also pushed higher after it emerged that Chinese Premier Li Qiang had called for more "forceful" measures to support China's battered stocks, giving a shot in the arm to investor confidence.

Hong Kong has lost about 10 percent since the turn of the year and Shanghai more than seven percent on worries that officials are not doing enough to help the economy, which grew last year at its slowest pace since 1990, excluding the Covid pandemic years.

Authorities are looking at a raft of initiatives, Bloomberg reported, adding that policymakers were seeking to mobilise nearly $280 billion, mainly from the offshore accounts of state-owned enterprises.

"It sounds like something had been readied in response to the recent equity rout," said Neo Wang at Evercore ISI.

"The market was poor enough to warrant such elevated attention -- China cannot afford to see A-shares sinking toward the Lunar New Year holidays."

Tokyo edged down on profit-taking after a surge in recent weeks pushed the Nikkei to three-decade highs. The Bank of Japan held off tightening monetary policy, as expected, and gave no clues about a timetable for a hawkish pivot from its ultra-loose position.

Investors were also gearing up for the release of corporate earnings, with market titans including Procter & Gamble, Tesla, IBM, Intel and Netflix due to report this week.

Key figures around 1130 GMT 

London - FTSE 100: DOWN 0.3 percent at 7,467.97 points

Paris - CAC 40: DOWN 0.4 percent at 7,382.32

Frankfurt - DAX: DOWN 0.1 percent at 16,659.74

EURO STOXX 50: DOWN 0.4 percent at 4,463.98

Tokyo - Nikkei 225: DOWN 0.1 percent at 36,517.57 (close)

Hong Kong - Hang Seng Index: UP 2.6 percent at 15,353.98 (close)

Shanghai - Composite: UP 0.5 percent at 2,770.98 (close)

New York - Dow: UP 0.4 percent at 38,001.81 (close)

Euro/dollar: DOWN at $1.0864 from $1.0885 on Monday

Dollar/yen: DOWN at 148.00 yen from 148.13 yen

Pound/dollar: DOWN at $1.2706 from $1.2708

Euro/pound: DOWN at 85.52 pence from 85.63 pence

West Texas Intermediate: DOWN 0.9 percent at $74.10 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $79.35 per barrel

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