Moving markets today: Hong Kong, China stocks drop; China targets 5% growth, bitcoin passes $68,000; Fed’s Powell’s testimony in focus
The S&P 500 closed slightly lower after a volatile day, with investors pausing ahead of key economic data and Fed Chair Jerome Powell’s congressional testimony. Chinese stocks declined, affecting Asian markets, due to disappointment with Beijing’s economic support plans announced during the National People’s Congress. Bitcoin reached a two-year peak. China aims for a 5% economic growth target, while momentum in China’s services sector softened in February. Investors await Powell’s testimony and crucial data releases, especially Friday’s non-farm payrolls report. Here are five key takeaways for your day.
China targets 5% economic growth in ambitious move
China aims for approximately 5% economic growth this year, considered ambitious by economists, amid challenges like a property slowdown and weak investor confidence. Premier Li Qiang will announce a 3% GDP budget deficit and issue 1 trillion yuan in special government bonds at China’s annual parliament session. The military budget will rise by 7.2%, maintaining a three-decade trend of at least 6.6% annual growth.
In February, China’s services sector grew slower than expected, per a private survey. The Caixin services PMI dipped to 52.5 from January’s 52.7, below the forecasted 52.9. A PMI above 50 signals sector expansion.
UK retail growth slows in February due to rainy weather: BRC
British consumer spending declined in February due to unfavourable weather and cautiousness amid high borrowing costs and inflation. The British Retail Consortium (BRC) reported a 1.1% increase in spending compared to the previous year, but after adjusting for inflation, it showed a decrease. This growth rate was slightly lower than January’s 1.2% rise, Reuters reported.
Tesla shares decline 7% amid 14-month low shipments from China factory
Tesla‘s shares fell over 7% as shipments from its China factory hit a 14-month low in February. Lunar new year disruptions and increased competition led to the decline. Preliminary data from the China Passenger Car Association showed Tesla delivering 60,365 vehicles from its Shanghai plant last month, down 19% year-on-year and 16% from January’s 71,447 units, the FT reported.
What’s coming up
On Wednesday, Chancellor Jeremy Hunt is scheduled to deliver the Spring Budget to Parliament at 12:30pm London time, which is anticipated to be the final significant economic update before the impending general election. Throughout the week, central bankers, including Jay Powell and Christine Lagarde, will deliver speeches regarding potential interest rate adjustments.
Stocks in Hong Kong and China slide after Beijing unveils annual budget
Stock markets experienced a mixed day as the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all saw declines of 0.25%, 0.12%, and 0.41% respectively. Japan’s Nikkei N225 fell by 0.59% after reaching a new high on Monday, while the broader Asia-Pacific shares outside Japan dropped by 0.4%. Chinese blue chips CSI300 and Hong Kong’s Hang Seng also faced losses of 0.2% and 1.3% respectively.
The dollar index, which measures the dollar against other major currencies, held steady at 103.83. Crude oil prices continued their downward trend due to challenges in demand despite expectations of extended production cuts by the OPEC+ group. Brent futures dipped to $82.69 per barrel, and U.S. West Texas Intermediate (WTI) declined to $78.55 per barrel. Meanwhile, spot gold remained near Monday’s levels at $2,119.69, its highest point since December 4th. Bitcoin surged to a two-year high above $68,600, closing in on its all-time peak as investors poured funds into the cryptocurrency.