Asia report: Markets mixed as PBoC maintains loan prime rates

20th Mar 2024 09:06

(Sharecast News) - Asia-Pacific markets finished Wednesday's trading session with a mixed performance, as investors continued to digest the Bank of Japan's (BOJ) recent policy adjustment and looked ahead to the upcoming decision from the US Federal Reserve.

The BoJ's move to raise interest rates for the first time in 17 years and abandon its yield curve control policy on Tuesday propelled the Nikkei beyond the 40,000 mark for the first time in nearly two weeks.

"Most Asian stock markets are seeing higher trading, influenced by the positive performance of global markets and the recent monetary policy announcements from the Bank of Japan, People's Bank of China, and the Reserve Bank of Australia," said TickMill market analyst Patrick Munnelly.

"Investors are also cautiously anticipating the monetary policy decision from the US Fed later in the day."

Munnelly noted that the BoJ made a historic shift by ending eight years of negative interest rates and implementing the first-rate hike in 17 years.

"It is widely anticipated that the Fed will maintain unchanged interest rates, but the accompanying statement from the central bank could have a significant impact on rate outlook."

Markets mixed as investors look ahead to US Fed

In Japan, markets remained closed due to the Vernal Equinox Day holiday.

China's Shanghai Composite edged up 0.55% to 3,079.69, while the Shenzhen Component rose by 0.21% to 9,717.37.

Leading the gains in Shanghai was Eastern Pioneer Driving School, up 10.1%, followed by Chongqing Zaisheng Technology, which rose 10.09%, and Fujian Aonong Biological Technology Group, which closed up 10.04%.

Hong Kong's Hang Seng Index experienced marginal gains, increasing by 0.08% to reach 16,543.07.

Leading the gains were Li Ning Co, Li Auto, and Orient Overseas International, which rose 5.67%, 4.53% and 3.29%, respectively.

South Korea's Kospi index jumped 1.28% to 2,690.14, with notable performers including Samsung Electronics, up 5.63%; LG Household & Healthcare, which added 4.58%; and Hanwha Ocean, which gained 4.26%.

In Australia, the S&P/ASX 200 index experienced a slight decline, slipping by 0.1% to 7,695.80.

South32, Ebos Group, and Perseus Mining were among the leading decliners, falling 4.17%, 4.14% and 3.85%.

New Zealand's S&P/NZX 50 index saw a modest uptick of 0.13% to close at 11,832.71, with KMD Brands up 3.92%, Mercury NZ ahead 2.37%, and Vista Group International rising 2.09% by the end of trading in Wellington.

In currency markets, the dollar was last up 0.58% on the yen, trading at JPY 151.73.

The greenback strengthened 0.27% against the Aussie to AUD 1.5350, and advanced 0.39% on the Kiwi to change hands at NZD 1.6588.

Oil prices showed a slight decline, with Brent crude futures last down 0.74% on ICE at $86.73 per barrel, and the NYMEX quote for West Texas Intermediate slipping 1.04% to $82.60.

China central bank keeps rates on hold

In economic news, the People's Bank of China opted to keep its one- and five-year loan prime rates (LPR) steady at 3.45% and 3.95%, respectively, as had been widely anticipated by markets.

The one-year rate serves as the reference rate for the majority of household and corporate loans, while the five-year rate acts as the benchmark for many property mortgages.

In a separate development, Reuters reported that the PBoC undertook a restructuring of its monetary policy committee.

The newly-reconfigured committee now included Wu Qing, the head of China's securities regulator, and Xuan Changneng, vice governor of the central bank.

Reporting by Josh White for Sharecast.com.