Hong Kong stocks edged higher while Japanese stocks plunged on Monday as investors bet on a potential U.S. Fed rate cut, while speculation grows that the Bank of Japan may raise interest rates later this month.
Hong Kong's stock market ended higher Monday with the benchmark Hang Seng Index up 0.67 percent to close at 26,033.26 points.
"In Hong Kong, we saw there the investors were starting to price in the likelihood of a U.S. Fed rate cut. Ahead of a speech by Fed Chair Jerome Powell, the markets were putting the chance of a cut at around 87 percent. Powell's comments today are unlikely to be particularly meaty, but the market will be certainly parsing them for any clues. With all that in mind, the Hang Seng added [about] 0.7 percent today," said Timothy Pope, a market analyst for China Global Television Network (CGTN).
"Standout stocks included the smartphone and appliance maker, and EV maker as well, Xiaomi -- it slipped 1.7 percent after announcing its EV deliveries for November. It says it shipped 40,000 vehicles, but that was a little below what investors had been expecting. According to Citi projections, it had been more in the region of 50,000 vehicles and that pushed the stock a bit lower. Telecoms equipment maker ZTE, though, was surging ahead today. This company hasn't always had the best press when it comes to overseas deals to build telecoms infrastructure, but according to Reuters, it's won a series of contracts to help build Vietnam's 5G network out more, alongside the Chinese giant Huawei and that pushed its shares up by 14 percent in Hong Kong on Monday," he added.
Tokyo stocks plunged sharply on Monday, weighed down by a stronger yen and rising long-term yields amid growing speculation that the Bank of Japan (BOJ) could raise interest rates this month.
The 225-issue Nikkei Stock Average ended down 950.63 points, or 1.89 percent, from Friday at 49,303.28. The broader Topix index finished 40.11 points, or 1.19 percent, lower at 3,338.33.
The yield on the benchmark 10-year Japanese government bond hit 1.87 percent, its highest level since June 2008, after BOJ Governor Kazuo Ueda said the central bank will weigh the pros and cons of raising its policy rate when its board meets later this month.
"Over in Japan, we saw the Nikkei 225 was trading a little bit lower today as a rising Japanese yen put pressure on equities index, [which] actually sank about 1.9 percent, just a little bit lower. A surge in the yields for Japanese government bonds was also adding to that pressure -- 2-, 5-, and 10- year yields all jumped to their highest levels since 17 years after the Bank of Japan's governor pretty much paved the way for a hike in interest rates in December. That came in a speech today and also came along with a little bit of a surprise because the governor Kazuo Ueda mentioned having constructive discussions on a rate hike with the new Prime Minister Sanae Takaichi. We know she has previously been seen as not in favor of a rate hike and of policy tightening at this point. So, that was good news for financial stocks. We saw Japanese banks gaining ground, but just about everything else was down today," Pope reported.
Hong Kong stocks edges up, Japan stocks plunges on rate outlooks: analyst
