Asian Stocks Recover as Focus Shifts to China GDP and Middle East Tensions
Asian Stocks Rise on Wall Street Strength
Most Asian stocks saw gains on Tuesday, bouncing back from recent losses and following the positive performance of Wall Street. However, market sentiment remained cautious due to ongoing tensions in the Middle East and upcoming economic data from China.
Technology Stocks Lead the Way
Technology stocks were the top performers of the day, with Hong Kong’s Index, South Korea’s Index, and Japan’s index all showing gains between 0.5% and 1%. This increase was largely driven by the strength of the technology sector.
Positive Cues from Wall Street
Regional shares received a boost from a positive close on Wall Street. The third-quarter earnings season showed higher closing numbers for heavyweight tech stocks, providing a strong lead-in for Asian markets.
Strong Economic Data from Singapore
Asian markets also took encouragement from stronger-than-expected data from Singapore, which is seen as a bellwether for trade in the region. This added to the overall positive sentiment in the markets.
Concerns over Israel-Hamas Conflict
Despite the recovery, most Asian markets were still dealing with significant losses from the past week. The ongoing Israel-Hamas war had a negative impact on investor appetite for risk-heavy assets. While some relief came from an agreement between the U.S. and Israel to allow aid into Gaza, concerns remained about the potential spillover of the conflict into the Middle East region.
Commodity Stocks Boost Australia’s Market
Australia’s market saw a 0.5% increase, driven by strength in commodity stocks. Iron ore miner Rio Tinto Ltd logged a rise in third-quarter shipments, leading to a 1.6% increase in its stock. Peer company BHP Group Ltd also added 0.8%.
Flat Opening Expected for India’s Index
Futures for India’s index pointed to a flat opening, as the strength in heavyweight tech stocks was likely to be offset by broader index weakness. Softer-than-expected data on price pressures showed that they remained in negative territory for the sixth consecutive month, although food prices remained high.
Chinese Stocks Prepare for GDP Announcement
Sentiment was subdued ahead of the release of key economic data from China, the largest economy in Asia. The third-quarter GDP data, expected on Wednesday, is likely to reveal continued weakness in economic growth. This has raised concerns about the effectiveness of recent monetary stimulus measures.
Impact on Asian Stocks
Chinese stocks, including the Shanghai Composite and Shenzhen Composite indexes, lagged behind their regional counterparts, losing between 0.1% and 0.3%. The market also grew doubtful about the extent of support the economy was receiving from recent stimulus measures.
People’s Bank of China to Decide on Benchmark Rate
The People’s Bank of China is set to decide on its benchmark interest rate this week, but it is widely expected to keep it unchanged after making no changes to its medium-term rates. An economic slowdown in China has weighed heavily on Asian stocks this year due to the country’s significant role as a trading partner in the region.
Bank of Japan’s Monetary Policy in Focus
In addition to China, Japanese data is also anticipated this week, which is expected to play a role in the Bank of Japan’s plans to tighten monetary policy.
