Asia report: Markets mixed as China returns from Lunar New Year

Equities on the mainland exhibited resilience, buoyed by upbeat travel data, while Hong Kong stocks faced a downturn.

“China's markets did not show the anticipated enthusiasm after the break, with only modest gains in stocks so far,” said TickMill market analyst Patrick Munnelly.

“During the Lunar New Year holiday, tourism revenues surged by 47% compared to the previous year, with over 61 million rail trips taken.

“However, this increase was partly due to a weak season last year.”

Munnelly noted that the People’s Bank of China chose not to cut rates again on Sunday, which could limit downward pressure on renminbi.

“Despite this, analysts believe there is potential for further policy stimulus due to the looming threat of deflation.

“China's blue chip index increased by 0.5% on top of its 6% pre-Lunar New Year rally, but it is still down 1% for the year and 43% from its peak in 2021.

“In contrast, Japan's Nikkei has risen almost 15% so far this year, coming close to its all-time peaks reached in 1989.”

Equity markets in mixed state across region

In Japan, the Nikkei 225 experienced a marginal decline of 0.04%, closing at 38,470.38, while the broader Topix index edged up by 0.57% to reach 2,639.69.

Among the leading decliners on Tokyo’s benchmark was Recruit Holdings, down 3.25%, followed by Advantest and Konica Minolta, which both fell 3.19%.

Contrastingly, China saw a positive trend with the Shanghai Composite jumping 1.56% to settle at 2,910.54 and the Shenzhen Component rising by 0.93% to 8,902.33.

ArcSoft, Hanma Technology Group, and Duolun Technology marked significant gains in Shanghai, respectively rising 18.78%, 10.16% and 10.11%.

In Hong Kong, the Hang Seng Index saw a downturn of 1.13%, closing at 16,155.61.

Leading the declines were companies like Li Ning Co, JD Health International, and Tingyi, falling 8.61%, 6.94% and 6.25%, respectively.

South Korea's Kospi index displayed resilience, climbing by 1.19% to reach 2,680.26.

Companies such as Kogas, Korea Electric Power, and Hanwha Aerospace were among the gainers, increasing 12.71%, 9.95% and 7.5%.

Australia's S&P/ASX 200 index demonstrated a marginal increase of 0.09%, closing at 7,665.10.

Noteworthy performers in Sydney included A2 Milk Company, up 12.48%; Liontown Resources, ahead 7.23%; and Reliance Worldwide Corporation, with gains of 6.58%.

New Zealand's S&P/NZX 50 index experienced a decline of 0.61%, settling at 11,653.27.

Companies like Ryman Healthcare, Oceania Healthcare, and Pacific Edge faced notable declines, falling 11.43%, 4.48% and 4.44%, respectively.

In currency markets, the dollar was last down 0.17% on the yen, trading at JPY 149.95, while it saw drops of 0.14% and 0.3% against the Aussie and the Kiwi, to AUD 1.5290 and NZD 1.6279, respectively.

On the oil front, Brent crude futures were last down 0.98% on ICE at $82.65 per barrel, while the NYMEX quote for West Texas Intermediate dropped 0.42% to $78.86.

Holiday travel and spending jump in China

In economic news, fresh official data revealed a surge in travel activity and spending during China's Lunar New Year holiday, surpassing pre-pandemic levels.

According to the Ministry of Culture and Tourism, domestic trips during the eight-day festival totalled 474 million, marking a significant 34.3% increase from last year.

Tourists also splurged on domestic holiday trips, with spending reaching nearly CNY 632.7bn, making for 47.3% year-on-year growth.

Both metrics surpassed levels recorded in 2019.

Meanwhile, in Thailand, economic indicators took a surprising turn as the economy unexpectedly contracted in the fourth quarter of last year, sparking speculation about imminent interest rate cuts.

Contrary to expectations, Thailand's GDP shrank 0.6% quarter over quarter, diverging from a Reuters-polled forecast of a 0.1% expansion.

Year-on-year, the economy grew 1.7%, falling short of Reuters estimates for 2.5% growth.

Reporting by Josh White for Sharecast.com.