Asian stock markets are in turmoil due to Chinese real estate crisis
Asian markets started the new week on a positive note due to new Beijing measures, despite psychological pressure from the liquidation of Chinese real estate giant China Evergrande (HK:3333). However, oil prices remain high today and we are sensitive to geopolitical risks, including a Hussi missile attack that caused a fuel tanker fire in the Red Sea and a drone attack in Jordan that killed three American soldiers.
MSCI's Asia-Pacific shares, the region's main stock index, rose in all countries except Japan, up 0.7% as of 0610 GMT. The major rise was explained by Beijing's new policy of calming the economy, adding further strength to an already bullish market. As a result, the local stock market shows that the situation in China's real estate industry is becoming more stable.
However, upon news of a Hong Kong court ordering the liquidation of Chinese real estate giant China Evergrande, Hong Kong's Hisen (3333) rose 0.74%, but the CSI 300, a key indicator of the Chinese stock market, showed no strength in early maturity. However, it eventually fell by 0.64%. In addition, Hisense reacted to the news with a 1.9% gain following the Chinese Securities Regulatory Commission's announcement that it would completely stop lending China's own shares.
In contrast, Japan's Nikkei index rose 0.77% and Korea's KOSPI rose 1.47%. “People want to believe what (Beijing) is doing,” said Damien Boey, principal macro strategist at Barrenjoey in Sydney. “So it looks like Chinese stocks are starting to stabilize now,” he said. “It may be the right time to buy, but things will get better over time.”
U.S. stock futures are showing a decline, with the S&P 500 down 0.07% on Friday, which led to a new high in the past five days, and appears to be slightly lower. Against this backdrop, the Federal Reserve's policy meeting is scheduled for this Wednesday, and market participants are paying attention to find clues about it. Most economists are predicting June, but traders are predicting the likelihood of a move to March is a coin toss, according to CME Group's FedWatch Tool.
The stock market is bracing again for a possible March move this week, with the dollar index sitting in the middle of its two-week range little changed from the previous day. Long-term bond yields have fallen over the past three points to reach 4.1315% and are in the center of their range since January 18. Last week's US data showed a "significant oil run", which pointed to the start of a tapering of missing policy, a strategist at Australia's Commonwealth Bank explained to clients.
In energy markets, Brent crude oil futures rose 29 cents, or 0.4%, to $83.84 a barrel, while U.S. West Texas Intermediate crude oil futures rose 34 cents, or 0.4%, to $78.35 a barrel. These conditions occurred despite the growing Middle East conflict risk, which could disrupt other supplies as the conflict in the Middle East expands.
Gold, a safe asset, rose 0.33% and is currently trading at $2,024.91. Bitcoin, a cryptocurrency, rose to $42,178.