Stocks Mixed With China, Adani, Fed in Limelight:
- Federal Reserve expected to downshift its rate hikes
- Mainland China equities have room for a catchup rally
Stocks were mixed in choppy trading on Monday as investors split their attention between the reopening of markets in mainland China, the plunge in Adani Group assets and looming interest-rate decisions in the US and Europe.
The Shanghai Shenzhen CSI 300 Index surged around 1%, putting it on course to close more than 20% above its October low and in a bull market as onshore exchanges reopened from the week-long Lunar New Year holiday.
Japanese and Australian equities swung between gains and losses while benchmark indexes in Hong Kong and Seoul were decisively lower. Indian stocks fluctuated while Adani Green Energy Ltd., Adani Total Gas Ltd. and Adani Transmission Ltd. all slumped of more than 10%.
This contrasts with more clear-cut optimism in bets that the Federal Reserve will slow the pace of rate hikes later this week, and to the advance on Wall Street Friday that saw traders brush off disappointing outlooks from some of the world’s largest technology companies to push the Nasdaq 100 up 1%.
The broader outlook for the Fed is keeping downward pressure on the dollar, which has helped Asian markets outperform the US this year. China’s pivot away from Covid Zero policies is also boosting the region, with indications over the last week that infections don’t appear to have gotten out of control during the festive season, while consumption statistics have supported wagers for economic recovery.
Key events this week:
- International Monetary Fund’s world economic outlook, Monday
- China industrial profits, PMIs, Tuesday
- Eurozone GDP, Tuesday
- US Conference Board consumer confidence, Tuesday
- Earnings Tuesday include: UBS, Unicredit, Snap and Advanced Micro Devices
- Eurozone Manufacturing PMI, CPI, unemployment, Wednesday
- US construction spending, ISM Manufacturing, light vehicle sales, Wednesday
- FOMC rate decision, Fed Chair Jerome Powell press conference, Wednesday
- Earnings Wednesday include: Meta Platforms and Peloton Interactive
- Eurozone ECB rate decision, President Christine Lagarde press conference, Thursday
- UK BOE rate decision, Thursday
- US factory orders, initial jobless claims, US durable goods, Thursday
- Earnings Thursday include: Alphabet, Apple, Amazon, Qualcomm and Deutsche Bank and Santander
- Eurozone S&P Global Eurozone Services PMI, PPI, Friday
- US unemployment, nonfarm payrolls, Friday
Source: Bloomberg.com