A global rally in the markets moved east as Asian stock markets moved up in the lead up to multiple central bank meetings slated in the next few days.
Asian markets upbeat
The Nikkei, Japan’s benchmark went up to 17, 291.15, an increase of 2.1 percent as news of private sector machinery orders seeing their biggest rise year on year since 2005, in January. China saw the Shanghai Composite Index rise 2.7 percent to hit 2,886.1, while the Hang Seng in Hong Kong gained 1.3 percent to get to 20,466.66 . Benchmark indices elsewhere in the region including South Korea, Taiwan as well as Australia also saw numbers inching up.
The gains have been attributed to a generally positive sentiment last week following the rally in the West, as well as signs of hope from China’s data. China’s critical indicator of the state of the economy, the fixed-asset investment, grew 10.2 percent in January and February compared to the same window a year ago. The announcement by the Mr. Liu, new chairman of the China Securities Regulatory Commission, that the government would continue to prop up the market also brought solace to investors. Stronger crude oil prices have also buoyed markets, with the S&P 500 closing the week at its peak for the year. In Japan, capital spending recovery was anticipated, as a key indicator - the private sector machinery order numbers - grew by 15 percent year on year in January.
Investors awaiting central bank meetings
Investors had reason for cheer as the European Central Bank kept its word and provided additional stimulus steps. Now, the focus shifts to the United States where the Fed has a meeting scheduled this week. The big question on investors minds is whether or not the central bank will bump up rates or if they plan to maintain status quo. The central bank of Australia is due to share the minutes of their meeting this week. Meanwhile, the Bank of England meeting, also imminent, is unlikely cause any ripples as expectations are that there will be no big policy changes announced.
Ahead of the Bank of Japan meeting, some experts said that while no significant announcements were likely, there could well be further stimulus efforts put in place for April. One of the topics on the table is whether or not to make USD 90 billion held in short-term funds exempt from a negative interest rate introduced by the bank in January. Investors are waiting and watching to see what policymakers decide, cautioning that money may rush to bank deposits and away from investments in the market.