Mumbai, 8 Feb (Commoditiescontrol): Most Asian markets tracked Wall Street higher on Thursday, but Chinese stocks were battling to sustain a rally after data raised concerns about deflationary pressures in China and suggested the economic slowdown may have further to run.
Japan's Nikkei surged 1.5%, while MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2%, with gains in Australia and South Korea being eroded by a 0.2% fall in Hong Kong's Hang Seng index. Shares of Alibaba fell 5.2% as its third-quarter revenues missed estimates.
China's blue-chips were up 0.4% in volatile trade, after climbing for three straight sessions to move away from five-year lows as Beijing rolled out a slew of measures to steady the market rout. Shanghai Composite index gained 1%.
Data on Thursday showed China's consumer prices fell 0.8% in January from a year ago, the biggest drop since 2009, and missing forecasts for a decline of 0.5%. Producer prices also fell again, a negative for sentiment. On a monthly basis, CPI rose 0.3%.
Beijing's latest attempt to steady markets before the week-long Lunar New Year holiday is the ousting of China's securities watchdog head on Wednesday, although that only drew a muted cheer from investors.
On Wall Street, S&P 500 closed at a record high, buoyed by strong earnings from Chipotle Mexican Grill and Ford Motor , which offset jitters about U.S. regional banks. Shares of New York Community Bancorp closed higher after the lender appointed a new executive chairman and said it could cut exposure to the commercial real estate segment.
On the rate front, a slew of Federal Reserve officials said they wanted to hold off on cutting interest rates until they had more confidence that inflation was headed down to 2%, but that mostly echoed the recent message from Chair Jerome Powell.
Markets are still pricing in an 80% probability of a rate cut as early as May, with futures implying around 120 basis points of easing for all of 2024, down from 145 basis points late last week.
Treasuries were in a holding pattern. The yield on benchmark 10-year notes were little changed at 4.1%, after edging slightly higher the previous day, but it was still up 7 basis points for the week, reflecting the pushback from Fed on early rate cuts.
The Treasury Department's record sale of $42 billion in 10-year notes drew strong demand, allaying some of the fears about excess supply in the market. The dollar was trading in a tight range after recent gains, holding at 103.99 against its major peers.
Oil prices extended gains after climbing for three straight sessions, supported by a larger-than-expected fall in U.S. fuel stocks and continued tensions in the Middle East.
Israeli Prime Minister Benjamin Netanyahu rejected the latest offer from Hamas for a ceasefire. Brent rose 0.3% to $76.46 a barrel, while U.S. crude edged up 0.3% to $74.08 per barrel.
Spot gold prices were 0.2% higher at $2037.49.
(By Commoditiescontrol Bureau: 09820130172)
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