TOKYO (AP) — Stocks rose in Shanghai on Tuesday as Chinese markets reopened after a weeklong holiday, but then gave up some of their initial gains as officials in Beijing outlined details of plans to revive the country’s second-largest economy. to breathe new life into the world.
The Shanghai Composite index rose 5.5% to 3,519.88 and in Shenzhen, Japan’s smaller market, the main index rose 5.3%. The Shanghai benchmark initially gained 10% but fell as officials from China’s top economic planning agency briefed reporters on a slew of previously announced policy measures aimed at tackling key issues such as a slump in the property market.
Hong Kong’s Hang Seng fell 5.8% to 21,758.45 as traders sold to safeguard gains from recent gains.
“The rally in Chinese markets has hit a wall, sending investors into a tailspin. The post-week holiday reopening wave barely had time to gather steam before fizzled out, and now the once-excited bulls are licking their wounds,” SPI Asset Management’s Stephen Innes said in a commentary.
Elsewhere in Asia, markets were mostly lower.
Tokyo’s Nikkei 225 index lost 1.2% to 38,861.09. while the dollar fell from 148.18 yen to 147.91 Japanese yen. A weaker yen tends to push stock prices higher.
The Kospi in Seoul fell 0.5% to 2,596.38. Australia’s S&P/ASX 200 fell 0.2% to 8,187.10.
US stock markets fell on Monday after Treasury yields hit their highest level since the summer and oil prices continued to rise.
The S&P 500 fell 1% to 5,695.94, still close to its all-time high from a week earlier. The Dow Jones Industrial Average fell 0.9% to 41,954.24, surpassing its own record. The Nasdaq index fell 1.2% to 17,923.90.
It’s a stagnation for US stocks after hitting a record on relief that interest rates are finally starting to fall again as the Federal Reserve has expanded its focus on keeping the economy going rather than just fighting high inflation. A bombshell report on U.S. job growth released Friday sparked optimism about the economy and hopes the Fed can make it a perfect landing.
When government bonds, considered the safest possible investments, pay more interest, investors are less likely to pay very high prices for stocks and other items that carry a greater risk of losing money.
It’s harder to appear attractive to investors looking for income when a 10-year Treasury bond pays a yield of 4.02%, up from 3.97% late Friday and the 3.62% three weeks ago.
Yields on two-year Treasury bonds, which are more closely tracking Fed expectations, rose further on Monday. It rose to 3.99% from 3.92% late Friday.
Treasury yields may also see an upward push from the recent rise in oil prices. Crude oil prices have risen on concerns that rising tensions in the Middle East could eventually lead to oil flow disruptions.
Brent crude, the international standard, lost $1.23 to $79.70 a barrel. On Monday the price had risen by 3.7%. U.S. crude oil, meanwhile, fell $1.24 to $75.90. The price also rose by 3.7% on Monday.
Stocks seen as the most expensive could see the biggest downward pressure from higher Treasury yields, and the spotlight is on Big Tech stocks. They have driven most of the S&P 500’s returns in recent years, rising to heights that critics called exaggerated.
Apple fell 2.3%, Amazon fell 3% and Alphabet fell 2.4%, serving as one of Monday’s heaviest weights on the S&P 500.
An exception was Nvidia, which rose another 2.3%. The company experienced another surge in excitement about artificial intelligence technology after Super Micro Computer rose 15.8% after saying it recently shipped more than 100,000 liquid-cooling graphics processing units.
If Treasury yields continue to rise, companies will likely need to post bigger profits to drive their stock prices much higher, and this week marks the start of the latest corporate earnings reporting season.
Analysts say earnings per share rose 4.2% for S&P 500 companies over the summer from a year earlier, led by technology and healthcare companies, according to FactSet. If these analysts are right, this would be a fifth straight quarter of growth.
In other trades, the euro rose from $1.0977 to $1.0986 early Tuesday.
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AP Business Writer Stan Choe in New York contributed.
