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Asian stocks muted as China tech rally cools, U.S. CPI awaited

Published 12/01/2023, 05:33 pm
Updated 12/01/2023, 05:33 pm

By Ambar Warrick

Investing.com -- Most Asian stock markets moved little on Thursday as a rally in heavyweight Chinese technology stocks ran out of steam, while markets turned cautious in anticipation of key U.S. inflation data that is expected to show that price pressures eased.

But risk-heavy Southeast Asian markets rallied on bets that receding price pressures will invite a less hawkish stance from the Federal Reserve, with bourses in Indonesia and Philippines rising around 1% each. Wall Street indexes also surged overnight on growing expectations that the U.S. consumer price index (CPI) will ease further in December.

Broader Asian markets took a more cautious stance ahead of the data. Any signs that inflation did not cool as expected in the past month could rattle risk-driven markets, given that it would allow the Federal Reserve to keep raising interest rates at a sharp clip.

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose slightly, while Hong Kong’s Hang Seng index added 0.2% as a two-day rally in heavyweight technology stocks wound down. Regional tech stocks were on a tear this week after the Chinese government signaled that it will drop its regulatory crusade against the country’s internet giants.

Data on Thursday also showed that Chinese CPI inflation increased slightly more than expected in December, as the country relaxed most of its strict anti-COVID curbs. But price pressures still remained subdued as the country grapples with its worst yet outbreak.

Japan’s Nikkei 225 index traded sideways, even as data showed that the country logged a record-high current account surplus in November, as strong returns on Japanese overseas investments largely offset a growing trade deficit.

The reading indicates some strength in the Japanese economy, even as the country faces slowing growth and rising inflation.

Australia’s ASX 200 index rose 1.2%, supported largely by data showing an unexpected rise in the country’s trade surplus in November. Australia’s massive commodity exports remained steady during the month, while imports dropped on sluggish local demand.

The Taiwan Weighted index fell 0.1%, with shares of Taiwan Semiconductor (TW:2330), the largest stock in the country, down 0.3% as the firm's revenue slightly missed expectations in the fourth quarter. But the chipmaker logged a much better-than-expected profit for the quarter.

India's Nifty 50 and BSE Sensex 30 indexes fell 0.5% each as markets awaited a CPI inflation reading from the country, which is expected to show that inflation remained steady in December.

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