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Broader Asian markets moved in a tight range as sentiment still remained fragile in the face of waning confidence over early U.S. interest rate cuts. U.S. stock futures rose marginally in Asian trade, with focus turning to upcoming consumer price index data and the minutes of the Federal Reserve’s March meeting.
Waning expectations of early U.S. interest rate cuts had battered global stock markets last week. Blowout payrolls data on Friday also showed persistent strength in the U.S. labor market.
Japanese stocks were the best performers for the day, with theNikkei 225 surging 1.6%, while the broader TOPIX added 1.2%.
Both indexes benefited from some bargain buying after clocking their worst weekly loss since December 2022- where they slid between 2.3% and 3.5%.
Losses in Japanese markets were driven chiefly by a rebound in the yen, after the government repeatedly warned it will intervene in currency markets to support the currency.
The yen weakened on Monday after Japanese wage growth data read as expected for February. Rising wages are a key consideration for the Bank of Japan to raise interest rates further, and are expected to increase substantially in the coming months.
More rate hikes present a ceiling for Japanese shares, with the Nikkei expected to stall around 40,000 points.
China’s benchmark Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.7% each on Monday as trade resumed after an extended weekend. Hong Kong’s Hang Seng index also lost about 0.4%.
Losses in Chinese markets were driven by renewed concerns over the property sector, after defaulted developer Shimao Group was slapped with a demand to liquidate by a top creditor.
Shimao’s liquidation bid adds to a growing list of Chinese developers facing such a scenario. Recently, Evergrande Group was also ordered to liquidate by a Hong Kong court, while beleaguered developer Country Garden was also hit with a winding up petition.
This in turn fueled persistent concerns over an extended downturn in China’s property market, which threatens a broader economic recovery in the country.
Other Asian markets moved in a tight range on Monday after clocking some losses last week. Anticipation of more cues on U.S. interest rates kept sentiment largely in check.
Australia’s ASX 200 rose 0.2%, while South Korea’s KOSPI added 0.1%.
Futures for India’s Nifty 50 index pointed to a mildly positive open, after the index scaled record peaks last week.
