- Asian equities are trading mixed with the Shanghai Composite flashing red.
- Dovish central bank expectations will likely keep Asian and global stocks better bid.
Stocks in Asia are trading mixed with Chinese stocks flashing red on concerns of a deeper slowdown in China, while other regional indices reporting gains, possibly on the dovish European Central Bank’s (ECB) expectations.
Scorecard
- The Shanghai Composite is down 0.33%.
- Japan’s Nikkei is reporting a 0.64% gain.
- Shares in South Korea and Hong Kong are flashing green.
- Australian shares are lacking a clear directional bias.
The mainland Chinese stocks are down for the second day. China’s producer price index “” a key barometer of corporate profitability “” fell 0.8% from a year earlier, according to the National Bureau of Statistics released on Tuesday.
China’s factory deflation could hit the global economy via exports. Even so, some of the Asian markets are better bid likely due to expectations that the ECB will dole out stimulus.
The FX and bond markets seem to have priced at least 10 basis points cut in interest rates. The investors are also expecting the central bank to restart bond purchases. The US Federal Reserve is also widely expected to deliver an interest rate cut next week.
As a result, the Asian and global equities will likely remain bid in the run-up to the next week’s Fed “” more so, due to the easing US-China trade tensions.
China on Tuesday offered to increase US agricultural purchases in exchange for a delay in tariffs and easing of restrictions on China’s telecommunications giant Huawei Technologies.
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