The Asian equities market experienced mixed performance overnight, with most stocks trading higher, except for Hong Kong which closed lower in a half-day session. Mainland China, on the other hand, was closed for the Lunar (Chinese) New Year holiday. President Xi, speaking at a Lunar New Year event, emphasized the importance of building on China's economic recovery progress. However, this pro-equity statement did not have a significant impact on Hong Kong-listed stocks, as the Mainland market was closed. It is worth noting that policy statements tend to impact Mainland markets more than the mostly foreign-owned Hong Kong market. We will have to wait until next week to assess the full impact of China's leader's positivity on Mainland stocks, as both the Shanghai and Shenzhen stock exchanges will be closed.
In its monetary policy report, the People's Bank of China (PBOC) expressed its intention to ensure stable and abundant liquidity in the markets. At the same time, a state-run media outlet reported that China's inflation rate is expected to grow at a 'moderate' pace in 2024, in contrast to the deflation indicated by the January consumer price index (CPI). This suggests that further rate cuts and stimulus measures may be implemented to achieve this target.
