China stocks bounce loses steam; focus turns to ECB
Asian stocks traded cautiously and bonds fell on Thursday while investors waited on more detail of China's stimulus plans and for a European Central Bank meeting later in the session.
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The dollar bounced from lows after a survey showed U.S. business activity picking up in January. The Canadian dollar fell after the Bank of Canada held rates but dropped language that had said it was prepared for further hikes.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5% in early trade, with the Hang Seng opening 0.6% higher and mainland indexes steady.
Japan's Nikkei fell 0.3%.
The strong U.S. data and a cut in Chinese bank reserve requirements, releasing about a trillion yuan ($140 billion) for lending, had cheered investors — lifting the S&P 500 to a record high and world stocks to a two-year peak.
China's cut came on the heels of a collapse in China's equity markets that pushed the Shanghai Composite to a four-year low on Monday and hammered the Hang Seng. Along with a Bloomberg report that China is mulling a big rescue fund for the stockmarket, it seems to have stabilised things for now but without inspiring much confidence yet in the outlook.
«This is not the panacea that will change the narrative too much,» said Tim Graf, head of Europe, Middle East and Africa macro strategy at State Street in London.
«More targeted stimulus would be a more powerful lever to push and they seem to be reluctant to do that.»
The Hang Seng is trading 8% above Monday's 15-month low, but it remains down more than 6% for the year to date and almost 20% below where it began 2023. World stocks are up 21% since then.
S&P 500 futures were 0.1% lower in Asia,
