Stocks in Australia & Japan Decline on Easing Rate-Cut Bets – Asia Market Wrap

Chinese stocks rose after authorities stepped up rescue operations, despite broader Asian weakness as hopes for a quick Federal Reserve policy pivot faded.

A key gauge of Chinese firms listed in Hong Kong jumped 4.4%, while the mainland benchmark of CSI 300 rose more than 3%. The gains came after Beijing took more steps to stem a stock rout, including broadening trading restrictions on certain investors and a pledge by the sovereign wealth fund to increase its holdings of exchange-traded funds.

The news that authorities intend to brief President Xi Jinping on markets as soon as Tuesday fuelled hopes for more aggressive attempts to bolster stocks. The offshore yuan gained.

The 10-year Treasury yield dipped three basis points in Asian trading, following another wave of heavy selling Monday, fueled by positive US economic data, which pushed the rate up by 14 BPS, the largest two-day increase since June 2022.

The Australian and New Zealand yields climbed, and the Australian currency strengthened after the Reserve Bank of Australia stated a further increase in interest rates cannot be ruled out, but kept the policy rate stable on Tuesday as expected.