Asian stocks struggle as China drags, rate cut bets dwindle
China and expectations the global rate easing cycle may not come as early as some had initially thought.
U.S.
Treasury yields edged higher while the dollar hovered near a one-month peak as investors pared their bets on a rate cut by the Federal Reserve beginning as early as March.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1%, though it was still languishing near Wednesday's two-month low of 490.45 points.
The index had tumbled more than 2% on Wednesday, its steepest one-day percentage fall in more than five months, led by a slump in Chinese stocks after a slew of economic data pointed to a shaky economic recovery in China.
«For Asia in particular, there are a few negative things that are impacting (markets),» said Khoon Goh, head of Asia research at ANZ.
«The paring back of rate cut expectations is definitely a factor… (but) for Asia, the bigger driver is the growth concerns around China.
»That continues to pose worries for investors."
China's economy grew 5.2% in 2023, slightly more than the official target, but the recovery was far shakier than many analysts and investors expected, with a deepening property crisis, mounting deflationary risks and tepid demand casting a pall over the outlook for this year.
China's blue-chip stock index bottomed at 3,204.6383 points, its lowest since 2019, while Hong Kong's Hang Seng Index touched an over 14-month low of 15,183.96.
«As bearish as the Hang Seng (Index) is, it is trying to find support around 15,300 after an extended move lower,» said Matt Simpson, senior market analyst at City Index.
«I see no immediate reason to be a buyer of China's equities, but bears may want to warrant caution, especially as the index moves towards 15,000 and the
