Asian stock markets experienced a mixed performance in thin trading on Thursday, following the closure of U.S. markets in observance of Juneteenth. This lull in activity came as U.S. futures and oil prices also showed varied results, reflecting a broader uncertainty in global markets.
In Tokyo, the Nikkei 225 index saw a modest increase of 0.2%, ending the day at 38,633.02. This rise comes despite the lack of significant trading volume, indicating some underlying investor confidence. In contrast, Hong Kong’s Hang Seng index dropped by 0.8% to 18,280.67.
The tech-heavy segment of the Hang Seng was hit harder, retreating 1.7% after a notable 3.7% jump the previous day, which had been driven by gains in Nvidia stocks. Meanwhile, the Shanghai Composite index also fell, down 0.4% to 3,005.44, suggesting a cautious sentiment among Chinese investors.
Adding to the complexity of the market dynamics was the performance of the Chinese yuan, which hit its lowest level this year. The central parity rate was set at 7.1192 yuan to the U.S. dollar by the China Foreign Exchange Trade System. This rate is determined based on a weighted average of prices from market makers before the interbank market opens each business day, and it influences daily trading. The decline in the yuan highlights ongoing concerns about China’s economic stability and its impact on global trade.
China’s central bank opted to keep its one-year lending benchmark rate unchanged at 3.45%, along with the five-year loan prime rate at 3.95%. The one-year loan prime rate serves as a benchmark for most corporate and household loans, while the five-year rate is crucial for real estate mortgages. This decision indicates a steady approach amid fluctuating economic conditions, aiming to balance growth without triggering inflation.
Comments from Pan Gongsheng, the Governor of the People’s Bank of China, further influenced market sentiment. Speaking at a financial forum in Shanghai, Pan assured that China would maintain accommodative monetary policies to support the economy. His remarks provided some reassurance but also underscored the challenges facing the world’s second-largest economy as it navigates a post-pandemic recovery.
Elsewhere in the region, other markets also showed mixed results. In Sydney, the S&P/ASX 200 remained largely unchanged at 7,769.40, reflecting a wait-and-see approach by investors. South Korea’s Kospi rose by 0.4% to 2,807.63, benefiting from positive sentiment in local technology stocks. Taiwan’s Taiex gained 0.9%, continuing its upward trend, while Bangkok’s SET index fell by 0.4%, indicating regional variances in investor confidence.
European markets did not fare much better on Wednesday. While London’s FTSE 100 gained 0.2% to 8,205.11, buoyed by data showing British inflation had fallen to the central bank’s 2% target, other major indices faced declines. Germany’s DAX slipped by 0.4% to 18,067.91, and France’s CAC 40 dropped by 0.8% to 7,570.20, as investors weighed economic uncertainties and policy decisions.
In the U.S., markets are set to reopen on Thursday following the Juneteenth holiday. On the previous trading day, the S&P 500 had added 0.3%, setting an all-time high for the 31st time this year, closing at 5,487.03. The Nasdaq composite edged up slightly to 17,862.23, and the Dow Jones Industrial Average gained 0.2% to 38,834.86, largely driven by Nvidia’s 3.5% surge, which boosted its market value further above $3 trillion.
In early Thursday trading, U.S. benchmark crude oil dipped by 6 cents to $80.58 per barrel, while Brent crude rose by 11 cents to $85.18 per barrel. The dollar showed slight gains against the Japanese yen, moving to 158.13 yen from 158.10 yen, and the euro slipped to $1.0732 from $1.0745, reflecting ongoing volatility in currency markets as traders react to the latest economic data and geopolitical developments.