---
title: "Stocks swing higher, supported by Hong Kong rally: markets wrap"
description: "Stocks turned higher as choppy trading in Hong Kong gave way to a surge in the shares of Chinese state-owned enterprises, creating a tailwind that helped along US and equity futures."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "International Finance"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-03-07-stocks-swing-higher-supported-by-hong-kong-rally-markets-wrap/"
published: "2023-03-07T05:52:52"
lang: "en-ZA"
word_count: 419
---

# Stocks swing higher, supported by Hong Kong rally: markets wrap

> Stocks turned higher as choppy trading in Hong Kong gave way to a surge in the shares of Chinese state-owned enterprises, creating a tailwind that helped along US and equity futures.

By Bloomberg · Published 7 March 2023, 07:52 SAST

## Key points
- Traders in Asia are cautiously awaiting cues from Chinese policymakers and Federal Reserve chair Jerome Powell, as major currencies and Treasuries remain subdued within narrow ranges. Australia’s central bank is expected to raise borrowing costs during the Asian session, while Powell's appearance before Congress later in the day could indicate how much more policy tightening he thinks is needed. The Hang Seng China Enterprises Index and Hang Seng Index both jumped as much as 2%, while the Australian dollar weakened on outlook for demand from China and a more hawkish Fed. Oil rallied on projections of a shale peak, while gold edged higher. Despite some encouraging signs of food and other goods prices, there is still significant price pressure on the services side that may drag on longer, according to Henrietta Pacquement of Allspring Global Investments. Investors are concluding a recent rally was likely overdone due to lingering recession risks.
- Major currencies and Treasuries remain subdued as investors await cues from Chinese policymakers and Fed Chair Jerome Powell.
- Australian bonds are flat ahead of the Reserve Bank of Australia’s decision, with the Australian dollar weakening on outlook for demand from China.
- The Hang Seng China Enterprises Index jumped as much as 2.4% while the Hang Seng Index climbed as much as 2%.
- Oil rallied, gold edged higher, but China's tempered economic forecast limited crude's upside.

## Content

Moves in major currencies and Treasuries remained subdued within narrow ranges as traders in Asia awaited more cues from Chinese policymakers and Federal Reserve chair Jerome Powell.

Investors continue to weigh the impact of China’s modest growth target – which comes with the silver lining of less pressure on inflation – along with the prospect of more interest rate hikes in major economies. Australia’s central bank is expected to raise borrowing costs during the Asian session, before attention shifts later in the day to Powell’s appearance in Congress.

Treasuries were steady in Asia, with yields remaining elevated and the rate on the 10-year maturity just below the closely watched 4% level. A gauge of dollar strength was little changed.

Australian bonds were flat ahead of the Reserve Bank of Australia’s decision, which is projected by economists to bring a 10th straight increase in the RBA’s benchmark. The Australian dollar was steady. It has weakened recently on the outlook for demand from China and a more hawkish Fed.

The Hang Seng China Enterprises Index jumped as much as 2.4% while the Hang Seng Index climbed as much as 2%. Leading gains were Cnooc, China Petroleum & Chemical and China Construction Bank.

Later on Tuesday, the Fed’s Powell will begin two days of testimony before Senate and House committees. He’ll have the chance of telegraphing how much more policy tightening he thinks is needed, ahead of a pivotal jobs report on Friday and the next US rates decision on March 22.

The current lack of traction for US equity markets shows many investors are concluding a recent rally was probably overdone, with recession risks lingering as central banks worldwide indicate they’re unlikely to soon pivot away from strict monetary tightening.

While the peak in commodities inflation may have already passed, and there are some encouraging signs in terms of food and other goods, there are still significant price pressures, said Henrietta Pacquement, head of the global fixed-income team at Allspring Global Investments.

“What is more persistent is what we are seeing on the services side and that may drag on a little longer,” she said on Bloomberg Television. Pacquement also cautioned that the outlook through 2023 is unclear. “There is a slim window for a no-landing of sorts but I do think you have to have the recession scenario in mind as well.”

Elsewhere in markets, [oil](https://www.bloomberg.com/news/articles/2023-03-05/oil-dips-on-china-s-cautious-growth-goal-as-fed-concerns-linger) rallied as a shale executive projected America’s most prolific basin will soon peak. China’s tempered economic forecast limited crude’s upside. Gold edged higher. **BM/DM**