Asian markets mixed as Fed hikes loom, China growth slows
HONG KONG, Jan 17, 2022 (BSS/AFP) - Asian investors started the week on a
cautious note Monday as they assessed the outlook ahead of an expected series
of interest rate hikes by the Federal Reserve, while data showed growth in
China's economy slowed at the end of last year.
While the fast-spreading Omicron coronavirus variant continues to cast a
shadow across trading floors, the focus is on the US central bank's plans to
tighten monetary policy to fight surging inflation.
Fed officials were out in force last week flagging the merits of raising
borrowing costs as soon as March, though boss Jerome Powell said they would
be careful to ensure they do not knock the recovery in the world's top
economy off course.
Still, expectations that the era of cheap cash that has helped power
markets to record or multi-year highs has weighed heavily for months, while
data showing consumer prices rocketing at a pace not seen in four decades has
added to the downbeat mood.
A weak reading on retail sales for December caused by concern about the
latest Covid wave and higher prices was compounded by a University of
Michigan survey showing consumer sentiment fell sharply in January.
That saw Wall Street turn in a tepid performance Friday, with disappointing
bank earnings also dragging sentiment.
Despite the uncertain start to 2022 for global markets, Eli Lee at Bank of
Singapore remained upbeat about the outlook.
"As we head into 2022, we believe that the post-pandemic bull market
remains broadly intact," he said in a commentary.
"Historically, bull markets do not end at the beginning of rate hike
cycles, and positive trends in global economic growth and earnings continue
to be positive fundamental drivers for the market."
- Macau casino stocks rise -
Asia was mixed in early trade with Tokyo, Shanghai, Sydney, Singapore,
Taipei and Manila up but Hong Kong, Seoul, Wellington and Jakarta down.
Mainland Chinese shares were given some support by news that the central
bank had cut interest rates for the first time since the height of the
pandemic last year as officials look to kickstart stuttering growth.
Data showed Monday that the world's number-two economy expanded 8.1 percent
last year -- its best rate in 10 years -- but slowed in the final three
months as it was hit by virus lockdowns around the country and weakness in
the crucial property sector.
Hong Kong-listed casino stocks rocketed after Macau officials on Friday
unveiled regulatory measures for the sector that were not as bad as initially
Under the proposed bill, the number of gaming concessions will remain at
six but their term will be halved to 10 years, while the proportion of local
ownership in casino firms will be lifted from 10 percent to 15 percent.
The revisions should "remove most investors' key concerns, (for example on)
dividends, government oversight, minimum shareholding by a Macau permanent
resident, gaming tax, etcetera", Citigroup analysts including George Choi
said in a note.
Sands Macau soared almost 15 percent, Wynn Macau and MGM China piled on
more than 10 percent each, while Melco was up eight percent.
That followed strong gains in New York, where Las Vegas Sands and Melco
rocketed more than 14 percent.