Focus this week will also be on what clues markets can glean from minutes of recent policy meetings of the US Fed and ECB about the two might start reducing interest rates as inflation drops
Major stock markets diverged Monday as traders awaited more earnings this week from heavyweights, including HSBC bank, Nvidia and Walmart.
Focus this week will also be on what clues markets can glean from minutes of recent policy meetings of the US Fed and ECB about the two might start reducing interest rates as inflation drops.
On Monday, mainland Chinese stocks were buoyant after Lunar New Year, leading gains in most other Asian markets, as figures showed holiday spending soared past pre-pandemic levels.
Hong Kong closed down 1.1%, breaking a three-day rally, with analysts saying investors felt uneasy after a decision by the People’s Bank of China to leave a key policy rate unchanged, seen as an effort to strengthen the yuan.
Tokyo’s key Nikkei index ended flat.
In Europe, Frankfurt slipped and Paris closed flat. London inched up, managing to avoid an overall loss as AstraZeneca shares rallied after the drugs giant had a lung cancer treatment approved in the US.
The US markets will be closed on Monday, but China is back after a week-long holiday, and we will have earnings from Nvidia in mid-week, noted Fawad Razaqzada, market analyst at City Index trading group.
Investors have continually ignored the Federal Reserve’s consistent pushback against expectations of an early rate cut. Instead, they have chosen to concentrate on mostly stronger earnings and the artificial intelligence optimism, taking advantage of the bullish momentum to drive stocks up, Razaqzada added.
Razaqzada cautioned that “a correction of some sort, should not come as major surprise in the tech sector”.
A larger-than-expected rise in US wholesale prices, as per data on Friday, dealt a blow to hopes of an early interest rate cut by the Fed.
