International markets were mixed on Monday as investors digested the results of the Taiwanese election and took stock of the situation in the Middle East. U.S. markets are closed for Martin Luther King day.
The focus in Asia has been on the fallout of the Taiwanese election, after voters chose as president-elect the current vice president, Lai Ching-te, a candidate who leans toward the island’s independence from China.
The election highlighted U.S.-China tensions, with Beijing rebuking the State Department for congratulating Lai, although President Joe Biden reiterated that the U.S. doesn’t support the independence of Taiwan.
“So far there hasn’t been any escalating rhetoric from the winning party or from China so markets will probably see the immediate tail risk as reduced, although this is something that probably bubbles under the surface for a long time ahead,” wrote Deutsche Bank analyst Jim Reid in a research note.
Taiwan’s TAIEX index closed up 0.2% on Monday, while Hong Kong’s Hang Seng Index fell 0.2%.
China’s central bank on Monday kept its key policy rates unchanged, in a suprise move. The People’s Bank of China injected 995 billion yuan ($138.93 billion) of liquidity into the banking system via its one-year medium-term lending facility at an interest rate of 2.5%, the same rate at its previous operation, when the market had projected a rate cut.
Japan’s Nikkei 225 climbed 0.9% with shipping companies leading gains as freight rates are expected to increase due to disruption stemming from the Middle East conflict. The Nikkei 225 index is at its highest levels since 1990 amid hopes of a normalization in monetary policy.
In Europe, the London Stock Exchange opened as normal, after police said they had made arrests over an alleged plot to disrupt trading on Monday. London’s FTSE 100 rose 0.1% in early trading.
Write to Adam Clark at [email protected]
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