European stock futures fell alongside Asian benchmarks. Hong Kong was an exception, reopening after the holidays to rally on news of additional reopenings in China. Euro Stoxx 50 futures were slightly lower, while S&P 500 futures were mixed after the index fell 0.4% on Tuesday. The Hang Seng Index rose more than 1%, while equity benchmarks in mainland China, Japan, South Korea, and Australia fell.
Treasuries fell, prompting the Bank of Japan to announce more unscheduled debt purchases to keep rising yields in check. The dovish move, combined with commentary from its summary of opinions from the December meeting, caused the yen to fall 0.4%.
Investor expectations for a rally to end a disastrous year for the financial markets in 2022 were dashed by the cautious mood. The value of global equities has decreased by a fifth, marking the biggest annual decline since 2008, and the global bond index has decreased by 16%. The dollar has risen 7%, and the 10-year US Treasury yield has risen above 3.80% from 1.5% at the end of 2021.
As Russia imposed some restrictions on crude exports to foreign buyers who adhere to a price cap, the outlook for oil, which held onto a three-week high, was also improved by the reopening of China’s markets.
Iron ore reached its highest level since early August, while copper rose in New York. Gold was trading flat after edging above $1,800 per ounce on Tuesday. South Korean retail investors have purchased a total of $2.8 billion in Tesla Inc. stock this year, despite the worst slump on record.
Tesla is still the most popular overseas stock among Korean retail traders, who increased their investment significantly during the pandemic. In the Asian nation, Elon Musk has developed a devoted following that attracts dip buyers during its 2022 collapse on top of those who invested during the previous two years’ rise.
LG Energy Solution Ltd., a Tesla supplier, has also benefited, with Korean mom-and-pop investors pouring a record amount of money into the battery maker’s initial public offering in January. LG Energy’s stock has increased 46% since its initial public offering.
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