Hang Seng Tech advanced more than 1%, with strength in Alibaba Group Holdings Ltd. in Hong Kong on Monday. The news that big fines have been imposed on Ant Group, a subsidiary of Alibaba, and Tencent Holdings Ltd. as a signal to end the crackdown on Chinese tech companies.
Alibaba shares rose 8 percent on Friday in the United States, while the index of Chinese companies listed in the United States rose more than 3 percent. Also, Ant suggests to buy back with 7.6% of its shares.
Stock index volatility in Asia, supported by stocks in Hong Kong and mainland China while weakness in Japan kept gains in check. US stock futures fell after most US stocks fell on Friday when wage data showed that inflation remains a threat. The S&P 500 fell 1.2% during the holiday-shortening week, while the Nasdaq 100 fell 0.9%.
Constructive dialogue between Beijing and Washington partially boosted sentiment in Asia on Monday. Treasury Secretary Janet Yellen’s two-day engagement with senior officials in Beijing is seen as offering a way for the United States and China to contain damage to their economies from the two countries’ intense competition.
Investors continue to face a host of competing forces as trading begins in Asia, including the risks of rising interest rates and recession. The latest data from China also shows that the world’s second largest country still lacks inflationary pressure.
said Vey-Sern Ling, Director of Union Bancaire Privee.
Treasury yields have held steady, with the 2-year remaining below 5% and the 10-year just above 4%.
The dollar rose against most of its G10 peers after the Bloomberg Spot Dollar Index slipped on Friday. The external yuan was little changed after the People’s Bank of China set the daily reference rate stronger than expected. The yen fell, heading for the biggest decline this month.
A series of jobs reports last week dampened speculation that the Federal Reserve will leave interest rates unchanged later this month. The outlook beyond that was unclear. Government jobs data came in below estimates but brought signs that wage inflation remains a threat to the Fed’s fight against price gains.
Traders will be closely watching US consumer prices this week. Economists at Bloomberg expect the headline figure to drop 3.1%, although they don’t see a halt to the Fed’s hike at its meeting later this month. Reports from major banks, including Citigroup Inc. and JPMorgan Chase & Co. , second-quarter earnings tone.
Downside surprises in inflation indicators this week could drive the bulls, sending the S&P 500 above a bull market channel, according to Ed Yardini, president of the research firm of the same name. On the other hand, higher-than-expected inflation readings may increase concerns that the Fed will be forced to tighten monetary policy to cause a recession as the only obvious way to bring down inflation.
Yellen said over the weekend that she would not be ruled out The threat of an economic recession in the United Statesstating that it was “appropriate and normal” for moderate growth and that inflation was still very high.
Oil fell on Monday after two consecutive weekly increases, and gold held steady. DM