Asian stocks pull back amid hopes of further stimulus from China
- Shares traders in Asia-Pacific stay cautiously optimistic.
- Coronavirus figures flash mixed signals while diplomats from Beijing show readiness to confront the epidemic.
- Chinese headlines will keep the driver’s seat amid a lack of major data/events.
Following their fiercest drop in three weeks, Asian equities bounce back amid clues of further liquidity infusion from China as well as cautious optimism considering Beijing’s upbeat outlook.
Despite Moody’s flashing warning to China and Asia, on the back of coronavirus fears, Chinese President Xi Jinping says that the dragon nation will be able to meet this year’s growth target.
The Reuters’ news follows comments from China’s Commerce Ministry that showed readiness to announce further measures to keep foreign investments. Also supporting the expectations of further stimulus from China come from the People’s Bank of China’s (PBOC) cut to the medium-term lending rate on Monday.
Concerning the coronavirus numbers, data from Hubei and mainland China suggests a steady decline in the infections. However, the death rate has been strong and the cases of the Princess cruise ship in Japan stand tall.
While portraying the same, MSCI’s index of Asia-Pacific shares outside Japan register 0.44% gains whereas Japan’s NIKKEI rises 0.94% to 23,415 during the pre-European session on Wednesday.
Markets in China and Hong Kong join those of Indonesia and India to register sub-1.0% gains whereas South Korea’s KOSPI loses 0.10% to 2,206 by the press time despite the government’s plan to unveil comprehensive economic measures.
The US 10-year treasury yields recover to 1.566% whereas S&P 500 Future buck the Wall Street’s losses.
Considering the lack of major data/events on the economic calendar, updates from China will be the key driver for the Asian equities.