Asia markets open mixed as markets await decision on China's key lending rates

Asia-Pacific markets opened with mixed results as investors awaited an update from China’s central bank on lending rates. In Australia, the S&P/ASX 200 dipped slightly, while Hong Kong’s Hang Seng index pointed to a stronger start. Japan’s Nikkei 225 was higher in its first hour of trade, while South Korea’s Kospi shed value. The People’s Bank of China’s announcement on its loan prime rates will be closely monitored. U.S. markets were closed for the Presidents Day holiday.

Equity markets have had a positive start to the year, fueling optimism among investors. The S&P 500 crossed the 5,000 mark, but political tensions and uncertainty over future interest rate cuts by the U.S. Federal Reserve have led some to believe that 2024 will be a year for stock pickers. Morningstar’s chief markets strategist, David Sekera, has named three under-the-radar stocks he likes at present.

Xpeng, an electric vehicle company, plans to hire 4,000 people and invest in artificial intelligence technology, according to CEO He Xiaopeng. He also expressed concern about intense competition in the EV space and the possibility of a “bloodbath” as a result. Xpeng will allocate significant funds to research and development in intelligent driving.

European stocks closed higher, with the Stoxx 600 index showing a modest increase. The UK’s FTSE 100 gained value, while France’s CAC 40 remained flat and Germany’s DAX saw a slight decline. UBS has identified several small- and medium-sized stocks in Europe that offer substantial upside potential based on certain criteria such as non-inclusion in major indexes, strong value and quality scores, positive price momentum, and relatively few short positions.

Futures for the S&P 500 and Dow remained largely unchanged, while Nasdaq 100 futures edged higher.