Stocks near one-month high, Chinese markets struggle By Reuters

© Reuters. FILE PHOTO: A passerby walks past an electronic monitor displaying stock indexes of several countries outside a bank in Tokyo, Japan, March 22, 2023. REUTERS/Issei Kato/File Photo

Amanda Cooper

LONDON (Reuters) – Global stocks fell to one-month highs on Tuesday as the Bank of Japan kept monetary policy unchanged, strengthening the yen and Japanese stocks and as Chinese investors remained uneasy about speculation about a massive government rescue package. There was a slight decline.

On this day, the MSCI global index was flat, but remained near the one-month high. This is thanks to the Hong Kong stock market, which had plummeted the previous day, rebounding by nearly 3% as foreign fund outflow accelerated and short selling rapidly increased.

Chinese stocks showed a more modest recovery after hitting a five-year low the previous day after China’s cabinet pledged to take more effective measures to stabilize market confidence. One option included mobilizing about 2 trillion yuan ($278.53 billion) to support the stock market, according to Bloomberg.

Elsewhere, investors were encouraged by the prospect of interest rates falling in other major economies, including the US, the euro zone and the UK. In these countries, the benchmark US has officially entered a bull market, trading within record highs by the end of 2023. Peaks.

Foreign investors have taken a big step forward in the past few years due to concerns about China’s economy, especially with the real estate sector under pressure.

Samy Char, an economist at Lombard Odier, said the risk of the aggressive selling that hit Chinese markets this week spreading to other parts of the financial world was low, but pain for domestic investors seemed inevitable.

He said, “It is a surplus economy. There is a lot of savings in the private sector, so there is no risk of financial contagion or a collapse of the financial system.”

“They have enough maneuverability and savings space to prevent financial mishaps. What they can’t prevent is the fact that they have to digest the excess, which means taking some losses,” Char added.

The yuan had its biggest one-day rally against the dollar in the offshore market in a month.

Ultra Rouge BOJ

Meanwhile, the BOJ kept interest rates in negative territory, but growing confidence that conditions were being put in place to phase out its ultra-loose monetary policy helped the yen rise and the Tokyo index hit a 34-year high.

At one point, the yen recorded its biggest daily gain in a month, knocking the dollar down as much as 0.75% to a session low of 146.99. It remained stable at 147.99.

Ray Attrill, head of FX research at National Australia Bank, said: “April is, in our view, the earliest time to consider tightening… We actually think there is a risk of moving later than April.” I said OTC:).

Monday’s rally on Wall Street, which sent the S&P 500 to a record close for the second straight session, did not lead to gains in European stocks, which saw the region’s index fall 0.2% due to falls in pharmaceutical and semiconductor stocks.

Investors are awaiting earnings from Netflix (NASDAQ:) later, and expectations are generally optimistic.

By currency, the euro fell 0.1% against the dollar to $1.087. The European Central Bank (ECB) meets on Thursday and is expected to keep monetary policy stable. Sterling was unchanged at $1.2711. The Bank of England meets next week to decide on interest rates.

U.S. Treasury yields rose slightly as investors benefited from a slight price hike on Monday. The 10-year government bond yield rose 3bp to 4.128%, and the 2-year bond yield rose 3bp to 4.41%.

Oil prices fell 1% after surging 2% the previous day. The prospect of a recovery in Libyan crude output came as concerns over general supplies were offset after a Ukrainian drone attack on Russia’s Novatek fuel terminal disrupted trade.

Futures were last down 1% at $79.26 a barrel.