TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Slide in Chinese shares hampers Asian markets despite Fed optimism

Rae Wee (Reuters)
Singapore
Thu, March 20, 2025 Published on Mar. 20, 2025 Published on 2025-03-20T10:23:46+07:00

Change text size

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Slide in Chinese shares hampers Asian markets despite Fed optimism People walk outside Exchange Square in Central, Hong Kong, China, on Feb. 24, 2025. (Reuters/Tyrone Siu)

A

sia shares were hobbled by weakness in Chinese markets on Thursday and struggled to build on Wall Street's rally, even as investor sentiment was lifted by the prospect that the Federal Reserve could still deliver two rate cuts this year.

The Fed on Wednesday left rates unchanged in a widely expected decision, but maintained its projection for two quarter-percentage-point rate cuts by the year-end.

Policymakers did revise up their inflation forecast for the year and marked down their outlook for economic growth, citing risks from US President Donald Trump's tariff policies.

Still, investors took comfort from the Fed's "dot plot" of policy rate expectations and Chair Jerome Powell's comments that tariff-driven inflation will be "transitory" and largely confined to this year, in turn sending stocks higher while US Treasury yields and the dollar fell.

Australian shares jumped 1 percent, while US futures also extended their rally after the cash session ended on a high.

Nasdaq futures ticked up 0.4 percent and S&P 500 futures advanced 0.3 percent. EUROSTOXX 50 futures similarly added 0.1 percent.

Prospects

Every Monday

With exclusive interviews and in-depth coverage of the region's most pressing business issues, "Prospects" is the go-to source for staying ahead of the curve in Indonesia's rapidly evolving business landscape.

By registering, you agree with The Jakarta Post's

Thank You

for signing up our newsletter!

Please check your email for your newsletter subscription.

View More Newsletter

Trading was thinned with Japan markets closed for a holiday, though Nikkei futures edged up 0.2 percent.

"Reassurance perhaps, but the ongoing path the Fed will tread remains a tight one to navigate, and the central bank remains firmly at the mercy of the incoming data, surveys that can be wholly fickle and market forces that may well still go after a firm response," said Chris Weston, head of research at Pepperstone.

Gold similarly scaled yet another record high of $3,055.96 an ounce, helped by the prospect of further Fed easing this year.

Trading of cash US Treasuries was closed owing to the Japan holiday, though futures ticked higher, implying lower yields. Bond yields move inversely to prices.

That in turn undermined the dollar, which fell 0.27 percent against the yen to 148.25, while the euro steadied near a five-month high at $1.0908.

Sterling scaled a four-month top of $1.3015 early in the session, ahead of the Bank of England's policy decision later on Thursday where it is similarly expected to keep rates on hold.

"We expect the [Monetary Policy Committee] members to signal the desire to see further disinflation as a reason to keep policy on hold this month. They will affirm that the policy direction remains towards further easing, but the timing will be data-dependent," said analysts at ANZ.

CHINA DRAGS

However, the buoyant mood failed to drive a broader rally across Asia, with MSCI's broadest index of Asia-Pacific shares outside Japan swinging between losses and gains to last trade a marginal 0.1 percent higher.

That was due to a slide in Chinese equities, with benchmark indexes in mainland China and Hong Kong falling sharply just after the open.

The CSI300 blue-chip index slid 0.66 percent while the Shanghai Composite Index last traded 0.46 percent lower. Hong Kong's Hang Seng Index sank 1.5 percent.

Analysts said there was no obvious trigger behind the move, and attributed it to some profit-taking after a blistering rally led by technology shares.

Earlier on Thursday, Beijing held its benchmark lending rates steady for the fifth straight month, matching market expectations.

The yuan, which has been pressured by China's wide yield differentials with the United States, was last little changed at 7.2307 per dollar in the onshore market. Its offshore counterpart was similarly steady at 7.2311 per dollar.

Elsewhere, data showed Australian employment unexpectedly fell in February to end a strong run of impressive gains, although the jobless rate stayed low.

The Aussie fell in response to the weaker-than-expected employment figures and last traded 0.27 percent lower at $0.6341.

Across the Tasman sea, data also out on Thursday showed New Zealand's economy grew faster than forecast in the fourth quarter, dragging the economy out of recession, but the improvement is not expected to change the central bank's planned official cash rate cuts.

The New Zealand dollar was last down 0.34 percent at $0.5797.

In commodities, oil prices ticked higher owing in part to an escalation of tensions in the Middle East.

Brent crude futures rose 0.5 percent to $71.13 a barrel, while US West Texas Intermediate crude (WTI) gained 0.36 percent to $67.40 per barrel.

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.

Share options

Quickly share this news with your network—keep everyone informed with just a single click!

Change text size options

Customize your reading experience by adjusting the text size to small, medium, or large—find what’s most comfortable for you.

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

Continue in the app

Get the best experience—faster access, exclusive features, and a seamless way to stay updated.