Asia report: Stocks mixed on quiet day for region

10th Jun 2024 08:04

(Sharecast News) - Asia-Pacific markets finished with a mixed performance on Monday following a stronger-than-expected US jobs report, which revealed increased hiring and wage growth for May.

That news late last week tempered expectations for imminent interest rate cuts by the Federal Reserve, with traders not anticipating rate reductions in the upcoming meetings of the Federal Open Market Committee.

"The previous week's surge in world shares following rate cuts in Canada and Europe quickly came to a halt, leaving Asian stocks to struggle on Monday due to holidays in Australia, China, Hong Kong, and Taiwan," said TickMill market analyst Patrick Munnelly.

"While it is highly likely that the Fed will reduce their projections for three rate cuts this year during their rate decision announcement on Wednesday, the extent of the reduction remains uncertain."

Munnelly said futures indicate an approximate 36 basis points of easing priced in for this year, and the likelihood of a pre-election rate cut is uncertain. In addition to the Fed, the Bank of Japan is also meeting this week, with expectations for a reduction in its substantial bond purchases.

"This may provide some relief for the yen, which was facing difficulties in strengthening beyond 157 per dollar against a strengthening greenback on Monday."

In Japan, investors were focussed on the revised first-quarter GDP numbers, which showed an annualised contraction of 1.8%.

That was slightly better than the initially reported 2% contraction and below the 1.9% contraction forecasted by economists in a Reuters poll.

The Nikkei 225 rose by 0.92% to 39,038.16, and the Topix increased by 1% to 2,782.49.

Leading the gains on the benchmark were Sharp, which surged 6.32%, Hitachi up 4.89%, and Sumco up 3.82%.

Markets in China and Hong Kong were closed due to the Dragon Boat Festival holiday.

South Korea's Kospi fell by 0.79% to 2,701.17, driven down by significant losses in stocks such as Netmarble Games, which dropped 5.87%, and HMM, which decreased by 5.59%.

Australian markets were closed in observance of the King's Birthday holiday, while New Zealand's S&P/NZX 50 index declined by 0.58% to 11,787.57.

Notable declines in Wellington included Pacific Edge, down 4.95%, Restaurant Brands, which fell 3.64%, and Tourism Holdings, down 3.31%.

Currency markets showed minor fluctuations, with the dollar last 0.05% stronger on the yen at JPY 156.83, while it lost 0.09% against the Aussie to AUD 1.5180, and slipped 0.04% from the Kiwi to change hands at NZD 1.6370.

Oil prices experienced slight declines, with Brent crude down 0.1% on ICE at $79.54 per barrel and the NYMEX quote for West Texas Intermediate decreasing 0.2% to $75.38.

Looking ahead, investors will be monitoring the Bank of Japan's rate decision on Friday and inflation data from China and India on Wednesday.

Reporting by Josh White for Sharecast.com.