HONG KONG: Markets gave a tepid reception to the Indian central bank's surprise post-budget rate cut, as Asian indices were mixed on the day. The 25bp cut put the policy repo rate at 7.5 .
The Shanghai index edged up half a point, while the Hang Seng slipped almost a full point and Nikkei was down 0.59 percent.
Investment-grade and sovereign bond yields widened slightly, with Asian CDS two points wider at between 102 and 104. Traders said it felt like the market was in decent shape, but that a degree of profit taking was in order. There were also worries that the US non-farm payrolls report due on Friday would disappoint.
One of the day's biggest movers was Alibaba, which came under the spotlight after the Taiwan Government ordered it to withdraw from the island in six months after violating investment rules.
Alibaba denied any wrongdoing and said it was cooperating with the government. The firm's 2024 bonds saw yields grow around 10bp to 3.758 percent, according to Tradeweb. Yesterday, the company's NYSE shares lost almost 3 percent.
"It hasn't been the best session, but the market feels better off and not terribly weak," said a Singapore-based trader. "On Alibaba, it's trading lower from the negative headlines, but a lot of cash has gone to work there, so profit taking probably makes some sense.
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