Asian stocks rose amid positive data on China's economic recovery
On Tuesday, February 6, Asian markets are showing growth in response to the strengthening of Chinese stocks. Other markets are being cautious amid statements from the Fed about a longer period before rate cuts begin. Additionally, the adjustment of rate forecasts has strengthened the US dollar. The broadest MSCI index of Asia-Pacific shares outside Japan showed a rise of over 0.8% after a decline of 0.7% in the previous session.
The Hong Kong Hang Seng index rose by 3%, while the Japanese Nikkei dropped by 0.22%.
This comes amid a sharp rise in Chinese stocks following enhanced support measures by the authorities, which helped to halt significant market losses.
The mainland China blue-chip CSI300 index grew by 1.5%, and the Shanghai Composite index halted its decline, increasing by 0.8%.
State-backed Chinese investors stopped a significant market downturn. In particular, China's state investment fund announced on Tuesday an increase in investments in exchange-traded funds (ETFs).
Additionally, the People's Bank of China warned that it is ready to recommend institutional investors to attract investments in stocks, and for listed companies to be encouraged to increase share buybacks.
Analysts at Goldman Sachs stated, "By our estimates, investors have bought almost 70 billion yuan of A-shares over the past month, but at least 200 billion yuan is needed to stabilize the market."
The Reserve Bank of Australia maintained its monetary policy and decided not to rush with rate cuts, similar to the Fed. As a result, the Australian dollar significantly strengthened.
Optimistic reports on the recovery of the US services sector and employment growth confirmed that the economy has strengthened enough and inflation will decrease, raising doubts about the Fed starting rate cuts soon. This kept the dollar near a two-month high.
The euro traded at $1.0750, and the Japanese yen was priced at 148.41 per dollar.
The Australian dollar rose by more than 0.4% to $0.6513.
Oil prices are mostly stable after US Secretary of State Antony Blinken's visit to the Middle East, which was to discuss ceasefire possibilities in the region. WTI oil was trading at $72.85 a barrel (+0.08%). Brent crude rose to $78.06 a barrel (+0.09%).
Gold was also relatively stable, trading at $2042.70 an ounce (-0.01%).