Asia stocks drift lower with China stimulus, US inflation in focus

Most Asian stocks moved in a flat-to-low range on Tuesday as Chinese markets struggled after recent fiscal measures from Beijing underwhelmed, with focus turning to an upcoming U.S. inflation reading this week. 

Risk appetite was seen mostly cooling after global stock markets clocked strong gains in the immediate aftermath of a Donald Trump victory in the 2024 presidential election. 

Regional markets took middling cues from a mildly positive overnight close on Wall Street, with U.S. stock benchmarks rising slightly to record highs. U.S. stock index futures were flat in Asian trade, as investors speculated over just what a Trump victory will entail for economic policy. 

Focus this week is also on key U.S. consumer price index inflation data, for more cues on interest rates. A slew of Federal Reserve officials are also set to speak in the coming days.  Chinese stocks struggle with stimulus in focus 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose marginally on Tuesday, while Hong Kong’s Hang Seng index fell 0.7%, extending steep losses from the prior session.

Chinese markets struggled for direction as investors were little impressed by Beijing announcing a 10 trillion yuan ($1.6 trillion) in debt measures to support local governments. 

But the measure was expected to offer little direct support to the economy. Investors were also disappointed by a lack of fiscal measures targeted at shoring up personal consumption and supporting the property market.

Media reports on Tuesday said China planned to slash homebuying taxes to support the property market, although stocks appeared to have taken little support from the report. 

Analysts said China had likely held back on more fiscal measures to gauge the impact of a Trump presidency on the country, given that the president-elect has vowed to impose steep trade tariffs on Beijing.  Japan buoyed by strong earnings, weak yen 

Japanese markets were an outlier among their regional peers, with the Nikkei 225 adding 0.4%, while the TOPIX surged 1%.

Japanese markets were buoyed chiefly by a swathe of strong earnings, with Sony Corp (TYO:6758 ) clocking an over 70% increase in its quarterly profit. But the media giant presented a weak outlook on dwindling hardware sales.

SoftBank Group Corp. (TYO:9984 ) rose 0.4% ahead of its quarterly earnings later in the day, with the technology investment house expected to log weaker earnings on a drop in tech valuations through the month.

Japanese markets were also buoyed by a soft yen, which remained near three-month lows.

Broader Asian markets were mostly negative. Australia’s ASX 200 fell 0.4% even as data showed consumer sentiment improved further in November. 

South Korea’s KOSPI lost 0.8%, hit by persistent weakness in tech stocks.

Futures for India’s Nifty 50 index pointed to a mixed open, as the index struggled to recover from steep losses in October. Indian consumer price index inflation is also due later in the day. 

 

Source: Investing.com