Market Wrap: 29 March 2023

Market Wrap: 29 March 2023

Stocks Push Higher as China Tech Buoys Sentiment:

  • Hong Kong leads advance in Asia on news of Alibaba overhaul
  • Dollar gauge climbs from lowest level since early February

Asian shares climbed with US and European equity futures as the Hong Kong market rallied on a planned revamp of Alibaba Group Holdings Ltd. that bodes well for Chinese technology companies.

A gauge of Asian stocks rose for a second day as benchmarks in Japan and Australia also increased. The Hang Seng Index advanced around 2% and a measure of Hong Kong-listed tech firms jumped close to 3%. Investors rushed back to Alibaba shares and other large tech companies that have been stung by a crackdown from Beijing over the past two years.

Alibaba surged 13%, with Tencent Holdings Ltd. and Baidu Inc. up around 2%. Shares in Japan-listed Softbank Group Corp., which owns a large stake in Alibaba, surged as much as 6.5%. 

The gains for Alibaba broadly matched an advance in its US-listed shares on Tuesday after the e-commerce giant said it would split into six units in a shakeup that promises to yield multiple initial public offerings.

The small gain for Australian shares reversed an early decline after slower-than-forecast inflation data bolstered the case for the central bank to pause its run of interest-rate increases. The local currency weakened.

Treasuries were little changed in Asian trading after the two-year yield rose eight basis points and the 10-year equivalent climbed four basis points Tuesday. 

An index of the dollar edged higher after ending Tuesday near the lowest level in eight weeks.

Investors are preparing for a raft of data on the US economy this week, including the central bank’s preferred measure of inflation — the so-called core PCE deflator — which is likely to factor into the Federal Reserve’s next policy decision. 


St. Louis Fed President James Bullard said “appropriate monetary policy can continue to put downward pressure on inflation” despite the turmoil in US regional banks. Meanwhile, consumers appear to have shrugged off the bank failures, with the latest consumer confidence figures unexpectedly higher in March.


Swaps traders have priced in more than a 50% probability the Fed will raise rates by a quarter point at its next meeting, with plans to ease thereafter. However, several strategists have joined BlackRock Investment Institute in saying markets are wrong in expecting imminent rate cuts. 

“The banking crisis and the new tighter standards for banks is equivalent to one to two rate hikes,” said Eva Ados, chief investment strategist for ERShares, in an interview with Bloomberg Television. “There is a big possibility here of a pricing mistake. We are pricing in the rate drop rather than the reason why rates are dropping, which is the banking crisis.”

Investors were also focused on European banks after French prosecutors said lenders including Societe Generale SA and BNP Paribas SA face collective fines of more than 1 billion euros ($1.1 billion) as part of a probe into tax fraud and money laundering.

Elsewhere, oil was higher after a clash between Iraq and its Kurdish region curtailed exports. Gold fell slightly and Bitcoin traded around $27,400.



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