Asian stocks experienced gains on Wednesday as traders anticipated signals from Beijing during its annual parliamentary session. The lack of previous stimulus measures had disappointed some investors. Concurrently, gold and bitcoin saw declines from their record highs. Traders exercised caution as they awaited Federal Reserve Chair Jerome Powell's congressional testimony, which will be closely scrutinized for indications of potential interest rate cuts.
Chinese stocks exhibited mixed performance following Beijing's announcement of a 5% growth target for 2024 during a key parliamentary meeting. The broader Asian market initially slipped before reversing course and trading 0.46% higher, according to MSCI's Asia-Pacific index. European futures suggested a slightly higher opening, while U.S. markets experienced a retreat on Tuesday, particularly impacting megacap growth companies like Apple and the chip sector.
Investors were cautious due to the Chinese economic targets for 2024, indicating a measured approach amid concerns about excessive debt and yuan weakness. This cautious sentiment resulted in a lackluster trading session in Asia. The blue-chip CSI 300 Index was 0.08% lower, while Hong Kong's benchmark Hang Seng rebounded by 2% after a 2.5% decline on Tuesday.
In the U.S., weak data on the services sector and a steeper-than-expected drop in new factory orders heightened interest in upcoming payroll data. Benchmark 10-year U.S. Treasury yields steadied after hitting a one-month low, with markets pricing in a 68% chance of a Fed rate cut in June, according to the CME FedWatch tool. Powell's congressional appearances starting on Wednesday are anticipated as significant events, although analysts expect him to adhere to his messaging.
The Japanese yen strengthened by 0.08% to 149.93 per dollar, while the sterling remained flat at $1.2704 ahead of Britain's budget announcement. The euro last bought $1.0853 ahead of a policy decision from the European Central Bank on Thursday, where interest rates are expected to remain at a record 4%. The focus will be on clues about potential future rate adjustments in the wake of stubborn inflation. Markets are pricing in 90 basis points of cuts from the ECB this year.
In cryptocurrency markets, bitcoin hovered around $66,000 after reaching a record high of $69,202 in the previous session. This surge was fueled by investors pouring money into U.S. spot exchange-traded crypto products. Spot gold wobbled to $2,127.36 an ounce after touching an all-time high of $2,141.59 on Tuesday.
U.S. crude rose by 0.29% to $78.38 per barrel, and Brent was at $82.27, up 0.28% on the day. Traders awaited additional policy details from a press conference involving representatives from the People's Bank of China and other regulators, scheduled for 0700 GMT on Wednesday.