Asian stocks skittish as rate fears persist; Hong Kong up on property cheer

Investing.com-- Asian stocks were a mixed bag on Thursday as fears of U.S. interest rates remaining high for longer remained in play, although the Federal Reserve did downplay any expectations for further interest rate hikes. 

Hong Kong stocks were an outlier, coming close to five-month highs as investors cheered the lifting of more restrictions on the beleaguered property market. 

Regional markets took middling cues from a negative overnight close on Wall Street, although U.S. indexes did end above their intraday lows after Fed Chair Jerome Powell said the bank had no intention of raising interest rates further. But Powell also said that progress towards its 2% inflation target appeared to be stalling, which heralded no immediate plans for rate cuts. 

U.S. stock index futures rose in Asian trade.

Hong Kong stocks buoyed by property market cheer 

Hong Kong’s Hang Seng index was the best performer in Asia on Thursday, rising 1.2% and coming close to a five-month peak hit earlier this week.

Gains were driven chiefly by real estate developers, after China lifted restrictions on multiple home buying across several major cities, mainly Beijing. 

The move, which comes after a 13-year freeze on buying multiple homes, was aimed chiefly at further stimulating the property market, which has been grappling with an over three-year downturn.

Hong Kong-listed developers including Sands China Ltd (HK:1928), China Resources Land Ltd (HK:1109) and Longfor Properties Co Ltd (HK:0960) rose between 2% and 3%, and were among the top performers on the Hang Seng. 

Mainland Chinese markets were closed for a holiday, and will remain closed for the remainder of the week. 

Japanese stocks muted as yen volatility quashes sentiment 

Japan’s Nikkei 225 and TOPIX indexes fell 0.1% each on Thursday, with sentiment towards the country remaining cautious amid volatility in the yen.

Suspected currency market intervention by the Japanese government saw the yen whipsaw wildly this week. But underlying weakness in the currency still persisted, especially in the face of high for longer U.S. interest rates. 

A weak yen benefits Japanese corporate earnings, specifically those with export exposure. But it also factors into higher inflation and weaker consumption in the country. 

Broader Asian markets were a mixed bag. Australia’s ASX 200 rose 0.6%, even as data showed the country’s trade surplus shrank to an over three-year low in March. 

South Korea’s KOSPI fell slightly, with further losses limited by a softer-than-expected inflation reading for April. 

Futures for India’s Nifty 50 index pointed to a muted open, with the Nifty likely to tread water in anticipation of more information on the 2024 general elections, which began last week. Indian markets are expected to see some volatility as the elections progress.