Asian stocks: Cautiously bid amid mixed market sentiment
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Asian stocks: Cautiously bid amid mixed market sentiment

  • Asian equities show mixed reaction to the US-China trade headlines, China’s PMIs.
  • Risk tone stays little changed ahead of a weeklong Chinese holiday season.

While recently renewed trade tensions between the US and China keep Asian share traders at bay, upbeat manufacturing activity data from China offered relief to the stocks. However, mixed numbers from Japan and New Zealand, coupled with a lack of clarity over the US/UK politics, continues to trouble the equity traders, which in turn portrays a cautiously bid scenario of Asian stocks.

Purchasing Managers’ Index from China’s official NBS and Caixin both surpassed market expectations for August month. The readings support equity traders from Australia, New Zealand, and China to confront latest US-China trade jitters after the Bloomberg story raised doubts that the US is considering a proposal to curb portfolio funds to China. Adding to the optimism is upbeat prints of second-tier data from Australia and New Zealand. Though, overall doubts surrounding any breakthrough from the US-China meeting, coupled with political pessimism at the US and UK, keep the investor confidence in check.

With this, China’s HANG SENG registers nearly 0.5% gains while Australia’s ASX 200 and New Zealand’s NZX50 are also in positive territories.

Elsewhere, Japan’s August month Retail Sales contrasted with Industrial Production but the dovish outlook of Bank of Japan (BOJ) policymakers, as conveyed in BOJ Summary of Opinions, seem failed to please the Japanese traders. As a result, MSCI’s index of Asia Pacific shares outside Japan gains 0.2% whereas Japan’s NIKKEI marks around 0.8% of loss.

Further, India’s BSE SENSEX stays on the back foot amid trade-negative headlines while South Korea’s KOSPI cheered trade-positive headlines from Japan.

Moving on, a week-long holiday season in China, starting from Tuesday, might curb the market reaction. However, a busy economic calendar and on-going global political plays could keep investors busy.

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