Asian markets were mixed on Tuesday (7/16), after comments from US Federal Reserve Chairman Jerome Powell sent Wall Street to new records.
Powell stated that the central bank it won’t wait until inflation hits 2% to cut interest, as Fed policy operates with “long and variable lags.” So “if we wait until inflation goes below 2%, we might be waiting a long time,” he said.
In China, there are many signs of improving economic performance in the first half of 2024, marking a dynamic economic recovery.
In this climate, the Japanese Nikkei closed 0.22% higher at 41,282.50 points. Shares of Japan’s TDK Corporation, the Nikkei’s sixth-largest stock by weight, jumped more than 4 percent.
Hong Kong’s Hang Seng lost 1.44% to 17,756.00, led by consumer shares, while in mainland China the Shanghai Composite rose 0.05% to 2,975.57 and the Shenzhen Component gained 0.62% to 8,855.89 units. Insurer Ping An saw its shares lose more than 5% as it announced it would cancel $102.6 million in Class A shares it owned for purchased securities. More broadly, Chinese insurers are proposing to issue $3.5 billion in convertible bonds due in 2029.
In South Korea, the Kospi rose 0.18% to 2,866.12, while in Australia, the S&P/ASX 200 fell 0.23% to 7,999.30, after hitting a record high on Monday.
After a weaker than expected print GDP in China, Goldman Sachs cut its forecast for China’s full-year gross domestic product to 4.9% from 5%, while JPMorgan cut its forecast to 4.7% from 5.2%.
“This highlights the need for the government to step up policy support in the second half if it is to ensure growth of around 5% for the whole year,” said Hui Shan, Goldman Sachs’ chief economist in China. which announced that the weak domestic. demand remains a big issue.
Investors continue to await developments from China’s third Plenary Session, where the high level of local government debt and the promotion of advanced manufacturing are on the agenda.