Stocks mostly fall on fears of rate hikes, China cuts LPR

Visitors stand in front of an electronic ticker at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, Monday, Nov. 30, 2020.

Toru Hanai | Bloomberg via Getty Images

Stocks in the Asia-Pacific region were mostly down on Monday as worries about the Fed’s aggressive hikes resurfaced, but Chinese markets rose after China cut its benchmark lending rates.

The Shanghai Composite rose 0.61% to 3,277.79 and the Shenzhen Component gained 1.19% to 12,505.68.

The Chinese central bank cut its one-year key rate by 5 basis points to 3.65% and its five-year rate by 15 basis points to 4.3%.

“We believe the asymmetric cuts … are intended to support longer-term borrowing and particularly mortgage lending, as the overall supply of credit remains ample amid sluggish credit demand,” the analysts said in a note on Monday. from Goldman Sachs Economic Research.

Elsewhere in Asia, Hong Kong’s Hang Seng index was down 0.6% in the last hour of trading.

The Nikkei 225 in Japan pared some losses but fell 0.47% to 28,794.5 and the Topix index slipped 0.1% to 1,992.59.

The South Korean Kospi lost 1.21% to 2,462.5 and the Kosdaq lost 2.25% to 795.87.

The S&P/ASX 200 in Australia fell 0.95% to end the session at 7,046.9.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan was down 0.95%.

“Recent speakers from the Fed have underscored the message that more rate hikes are coming as the fight against inflation has not yet been won,” wrote Rodrigo Catril, currency strategist at the National. Australia Bank in a Monday note.

Investors are eagerly awaiting the Fed’s annual economic symposium in Jackson Hole, which begins Thursday in the United States.

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