Stock market today: Asian shares are mixed as China unveils 5% economic growth target for 2024

BEIJING (AP) — Shares were mixed Tuesday in Asia after China’s premier said the country’s target for economic growth this year is around 5%, in line with expectations.

Hong Kong’s benchmark fell while Shanghai edged higher.

Li Qiang, addressing the opening meeting of China’s National People’s Congress, also said Beijing would issue 1 trillion yuan ($139 billion) in long-term bonds to help bridge funding gaps, provide support to financially strapped local governments and invest in both advanced technology and in social support and education.

Li also said China would expand government-subsidized housing, part of a program aimed at reversing a downturn in the property market after a crackdown on excess borrowing caused dozens of developers to default on their debts.

But the government’s intention to keep its deficit at 3% of China’s GDP disappointed investors hoping for more aggressive action, Stephen Innes of SPI Asset Management said in a commentary.

“The unchanged target of 3% fell below expectations and signaled a cautious approach to fiscal policy,” he said.

The congress is the year’s biggest political event, though it mainly just endorses policies set by top leaders of the ruling Communist Party.

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China’s economy expanded at a 5.2% annual rate last year after growth dipped to 3% in 2022.

The initial reaction to Li’s address and the annual budget report, also issued Tuesday, appeared tepid. Hong Kong’s Hang Seng index lost 2.7% to 16,153.97 and the Shanghai Composite index rose 0.3% to 3,047.79, barely budging for most of the day.

Japan’s Nikkei 225 index ended flat at 40,097.63, just below Monday’s record close.

In Seoul, the Kospi sank 0.9% to 2,649.40, while Australia’s S&P/ASX 200 edged 0.2% lower to 7,724.20.

India’s Sensex declined 0.3% while Taiwan’s Taiex gained 0.4%.

On Monday, the S&P 500 slipped 0.1% to 5,130.95, coming off its latest all-time high and its 16th winning week in the last 18. The Dow Jones Industrial Average dipped 0.2% to 38,989.83, and the Nasdaq composite lost 0.4% to 16,207.51.

Momentum slowed for U.S. stocks following their roar higher on excitement that inflation appears to be cooling, cuts to interest rates may be coming and the U.S. economy has so far shrugged off predictions for a recession. At the same time, a frenzy around artificial-intelligence technology has catapulted some stocks to stratospheric heights.

Super Micro Computer, which sells server and storage systems used in AI and other computing, jumped another 18.6% Monday. It has surged nearly 1,000% in the last 12 months.

The poster child of AI mania is Nvidia, whose chips are powering much of the move into AI. It rose another 3.6% Monday to bring its gain for the year so far to 72.1% after more than tripling in 2023.

Such spurts are bolstered by a surge in profits and expectations for tremendous growth to continue, but they raise worries about a potential bubble.

Several events scheduled for this week could upset the market.

On Wednesday, the chair of the Federal Reserve, Jerome Powell, will testify before a House of Representatives committee about monetary policy. He has said the Fed’s next move will likely be a cut, but he’s also said it needs more evidence that inflation is falling decisively toward its 2% target. That was before reports recently showed inflation at both the consumer and wholesale levels were higher than expected.

A report on Friday will show how the U.S. job market is doing, with economists forecasting a slowdown from January’s strong growth.

Several retailers will also offer their latest earnings reports this week. They include Costco Wholesale, Gap and Nordstrom.

Another retailer, Macy’s, jumped 13.5% after two investment firms raised their offer to buy the shares they don’t already own.

Elsewhere on Wall Street, Spirit Airlines lost 10.8%. JetBlue Airways is ending their proposed $3.8 billion combination after a court ruling blocked their merger. JetBlue rose 4.3%.

Apple fell 2.5% after the European Union hit it with a fine of nearly $2 billion for unfairly favoring its own music streaming service over Spotify and other rivals.

In other trading early Tuesday, U.S. benchmark crude oil lost 43 cents to $78.31 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 35 cents to $82.45 per barrel.

The U.S. dollar slipped to 150.49 Japanese yen from 150.53 yen. The euro also fell, to $1.0851 from $1.0856.