Stock market today: Asian shares are mixed as China unveils 5 per cent economic growth target for 2024

PTI | Beijing | Updated: 05-03-2024 13:07 IST | Created: 05-03-2024 13:07 IST
Stock market today: Asian shares are mixed as China unveils 5 per cent economic growth target for 2024
  • Country:
  • China

Shares were mixed on Tuesday in Asia after China's premier said the country's target for economic growth this year is around 5 per cent, in line with expectations.

Hong Kong's benchmark fell while Shanghai edged higher.

Li Qiang, addressing the opening meeting of China's National People's Congress, also said Beijing would issue 1 trillion yuan (USD 139 billion) in long-term bonds to help bridge funding gaps, provide support to financially strapped local governments and invest in both advanced technology and in social support and education.

Li also said China would expand government-subsidized housing, part of a programme aimed at reversing a downturn in the property market after a crackdown on excess borrowing caused dozens of developers to default on their debts.

But the government's intention to keep its deficit at 3 per cent of China's GDP disappointed investors hoping for more aggressive action, Stephen Innes of SPI Asset Management said in a commentary.

"The unchanged target of 3 per cent fell below expectations and signalled a cautious approach to fiscal policy," he said.

The congress is the year's biggest political event, though it mainly just endorses policies set by top leaders of the ruling Communist Party.

China's economy expanded at a 5.2 per cent annual rate last year after growth dipped to 3 per cent in 2022.

The initial reaction to Li's address and the annual budget report, also issued Tuesday, appeared tepid. Hong Kong's Hang Seng index lost 2.7 per cent to 16,153.97 and the Shanghai Composite index rose 0.3 per cent to 3,047.79, barely budging for most of the day.

Japan's Nikkei 225 index ended flat at 40,097.63, just below Monday's record close.

In Seoul, the Kospi sank 0.9 per cent to 2,649.40, while Australia's S and P/ASX 200 edged 0.2 per cent lower to 7,724.20.

India's Sensex declined 0.3 per cent while Taiwan's Taiex gained 0.4 per cent.

On Monday, the S and P 500 slipped 0.1 per cent to 5,130.95, coming off its latest all-time high and its 16th winning week in the last 18. The Dow Jones Industrial Average dipped 0.2 per cent to 38,989.83, and the Nasdaq composite lost 0.4 per cent to 16,207.51.

Momentum slowed for US stocks following their roar higher on excitement that inflation appears to be cooling, cuts to interest rates may be coming and the US economy has so far shrugged off predictions for a recession. At the same time, a frenzy around artificial-intelligence technology has catapulted some stocks to stratospheric heights.

Super Micro Computer, which sells server and storage systems used in AI and other computing, jumped another 18.6 per cent on Monday. It has surged nearly 1,000 per cent in the last 12 months.

The poster child of AI mania is Nvidia, whose chips are powering much of the move into AI. It rose another 3.6 per cent on Monday to bring its gain for the year so far to 72.1 per cent after more than tripling in 2023.

Such spurts are bolstered by a surge in profits and expectations for tremendous growth to continue, but they raise worries about a potential bubble.

Several events scheduled for this week could upset the market.

On Wednesday, the chair of the Federal Reserve, Jerome Powell, will testify before a House of Representatives committee about monetary policy. He has said the Fed's next move will likely be a cut, but he's also said it needs more evidence that inflation is falling decisively toward its 2 per cent target. That was before reports recently showed inflation at both the consumer and wholesale levels were higher than expected.

A report on Friday will show how the US job market is doing, with economists forecasting a slowdown from January's strong growth.

Several retailers will also offer their latest earnings reports this week. They include Costco Wholesale, Gap and Nordstrom.

Another retailer, Macy's, jumped 13.5 per cent after two investment firms raised their offer to buy the shares they don't already own.

Elsewhere on Wall Street, Spirit Airlines lost 10.8 per cent. JetBlue Airways is ending their proposed USD 3.8 billion combination after a court ruling blocked their merger. JetBlue rose 4.3 per cent.

Apple fell 2.5 per cent after the European Union hit it with a fine of nearly USD 2 billion for unfairly favouring its own music streaming service over Spotify and other rivals.

In other trading early Tuesday, US benchmark crude oil lost 43 cents to USD 78.31 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 35 cents to USD 82.45 per barrel.

The US dollar slipped to 150.49 Japanese yen from 150.53 yen. The euro also fell, to USD 1.0851 from USD 1.0856.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback