Asia report: Most stocks rise as China stands pat on rates

Most stock markets in the Asia-Pacific region closed in positive territory on Monday, following the China central bank's expected decision to keep key interest rates unchanged.

Japan's benchmark Nikkei 225 edged up 0.07% to close at 27,531.94, while the Topix rose 0.39% to 1,999.71.

Among the top performers were Yokohama Rubber, which climbed 10.2%, and Nippon Paper Industries, up 4.35%.

In China, the Shanghai Composite gained 2.06% to 3,290.34, while the Shenzhen Component rose 2.04% to 11,954.13.

EmbedWay Shanghai surged 10.02%, while 360 Security Technology rose 9.99%.

Hong Kong's Hang Seng Index advanced 0.81% to 20,886.96, with Haier Smarthome up 5.11% and Lenovo Group gaining 4.72%.

South Korea's Kospi index added 0.16% to 2,455.12, with Conbuzz soaring 29.95% and HLB Global rising 20.54%.

Meanwhile, the S&P/ASX 200 in Australia gained 0.06% to close at 7,351.50, with GQG Partners climbing 4.71% and QBE Insurance Group rising 3.68%.

However, New Zealand's S&P/NZX 50 led losses in the region, falling 2.05% to 11,896.05, with Serko down 8.15% and Vista Group falling 7.53%.

“Asian equities opened on the backfoot given a mixed handover from Wall Street as investors squared positions ahead of the Friday close and the US Presidents Day holiday today - with the NYSE closed today,” said TickMill Group market analyst Patrick Munnelly of Monday’s moves in the region.

“Overnight geopolitical concerns were once again at the fore, with North Korea test firing an intercontinental ballistic missile and multiple rocket launcher drills.

“This was coupled with lingering China-US tensions - as China warned the US on escalating tensions regarding ‘ballon-gate’, the US countered with its own warnings regarding China providing pro-Russia support in the Ukraine war.”

In economic news, the People’s Bank of China (PBoC) sated market expectations by holding its one-year loan prime rate (LPR) for February at 3.65%.

It also stood pat on its five-year LPR at 4.30%, also in line with market forecasts.

“On balance the PBoC is likely to steer down benchmark LPRs in March or April, in order to boost private sector credit demand,” said Duncan Wrigley at Pantheon Macroeconomics.

“Policy-driven infrastructure and industrial investment probably remains strong, based on large long-term corporate loans in January, but private sector investment is likely still weak, given falling exports and funding challenges at micro, small and medium-sized enterprises.

“Consumer spending has begun a tentative recovery, but it is at an early stage and further policy support is needed to ensure it continues.”

Elsewhere, Malaysia recorded a trade surplus for the 33rd consecutive month in January 2023, coming in at MYR 18.2bn (£3.42bn), slightly lower than expectations.

The country's exports grew 1.6% year-on-year to MYR 112.8bn, while imports expanded 2.3% to MYR 94.7bn.

Malaysia’s total trade increased 1.9% to MYR 207.5bn, up from the MYR 203.6bn print in January last year.

On the currency front, the yen was 0.01% stronger on the dollar at JPY 134.13, while the Aussie advanced 0.3% to AUD 1.4493.

The Kiwi weakened 0.18% against the greenback, to last trade at NZD 1.6037.

In oil markets, Brent crude futures were last up 0.69% on ICE at $83.57, while the NYMEX quote for West Texas Intermediate was 0.58% firmer at $76.78.

Looking ahead, investors were closely watching the Reserve Bank of New Zealand's interest rate decision, set to be announced on Wednesday.

The bank was expected to raise its official cash rate (OCR) by 50-basis points to 5.25% in its ongoing bid to bring inflation down.

New Zealand was currently assessing the damage of two deadly natural disasters in recent weeks, with flash flooding in the largest city Auckland at the end of January being followed by the destructive Cyclone Gabrielle hitting much of the North Island a week ago.

Reporting by Josh White for Sharecast.com.