Tue, Jan 17, 2023 page12

• Equities rise ahead of China data

  MARKET OPTIMISM: China is due to release its GDP figure for the past quarter, while the Bank of Japan is due to provide an update on its monetary policy

  • AP, BANGKOK
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  Shares were mostly higher in Europe and Asia yesterday ahead of China’s release of economic growth figures and a policy update this week from Japan’s central bank.

  Germany’s DAX edged 0.1 percent higher to 15,101.73 and the CAC40 in Paris was nearly unchanged at 7,022.46. Britain’s FTSE was up 0.1 percent at 7,851.93. The future for the S&P 500 lost 0.5 percent while that for the Dow Jones Industrial Average slid 0.3 percent.

  China is due to release a slew of economic data today, including its GDP for the past quarter.

  

  A police officer rides a bicycle in front of an electronic stock board showing the Nikkei 225 Index at a securities firm in Tokyo yesterday.

  Photo: AP

  Economists estimate that the world’s second-largest economy slowed further in the October-to-December period with a sharp rise in COVID-19 outbreaks as the government reversed course and loosened its rigorous pandemic controls.

  Tomorrow, Japan’s central bank is due to provide an update on monetary policy as expectations build that it might opt to let yields on long-term government bonds rise further even if it does not change its minus-0.1 percent benchmark interest rate.

  The Bank of Japan’s decision last month to let the yield on 10-year bonds fluctuate in a wider range shook world markets.

  In Asian trading, the TAIEX ended 0.69 percent at 14,924.01 and Tokyo’s Nikkei 225 lost 1.1 percent to 25,822.32.

  The Hang Seng Index in Hong Kong gained less than 0.1 percent to 21,746.72 and the KOSPI in Seoul added 0.6 percent to 2,399.86.

  The Shanghai Composite index added 1 percent to 3,227.59, Australia’s S&P/ASX 200 climbed 0.8 percent to 7,388.20, while Mumbai’s SENSEX lost 0.3 percent.

  Bangkok’s SET gained 0.2 percent on forecasts for a turnaround for the economy, which has been battered by the pandemic.

  The year has begun with optimism that cooling inflation could lead the US Federal Reserve to ease off soon on sharp interest rate hikes that slow the economy and risk causing a recession. They also hurt investment prices.

  Slowing segments of the economy and still-high inflation are dragging on profits for companies, which are one of the main levers that set stock prices.

  Friday marked the first big day for companies in the S&P 500 to show how they fared during the final three months of last year, with a bevy of banks at the head of the line.

  One big worry on Wall Street is that S&P 500 companies might report a drop in profits for the fourth quarter from a year earlier.

  If the US economy does fall into a recession, as many investors expect, sharper drops in profits might be set for this year. That is why the forecasts for upcoming earnings that CEOs give this reporting season might be even more important than their latest results.

  The Fed has been intent on such numbers staying low. Otherwise, it could cause a vicious cycle that would only worsen inflation. Consumers could start accelerating their purchases in hopes of getting ahead of higher prices, for example, which would only push prices higher.
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