Market Outlook: Asian Markets Cautious Ahead of Chinese GDP Data
Asian markets on a cautious footing
Asian markets are expected to open cautiously on Monday following Wall Street’s slide and a surge in oil prices on Friday. The escalating violence in the Middle East adds to the cautious sentiment. Investors are also awaiting top-tier Chinese economic data later in the week, which could further impact market sentiment.
Important economic data to watch
Today, investors have their eyes on Japanese industrial production, Indonesian trade, and Indian wholesale price inflation figures. Later in the week, the central banks of South Korea and Indonesia will deliver their latest policy decisions and outlooks. However, the most significant day is Wednesday when China will release unemployment, industrial production, retail sales, business investment figures for September, and third-quarter GDP data.
China’s GDP growth under scrutiny
GDP growth in China is a crucial focus for market participants. It is widely known that China’s economy has not rebounded as strongly as expected after the COVID-19 lockdown restrictions. Concerns about the property sector, deflation, high youth unemployment, foreign outflows, and the weakening exchange rate have plagued China’s growth prospects. Economists predict a rebound in growth for Q3 but expect a slowdown on a year-on-year basis. The figures released on Wednesday will be crucial in determining whether China can meet its official 2023 goal of around 5% GDP growth.
Political developments and market performance
This week, Russian President Vladimir Putin will meet Chinese President Xi Jinping. Putin’s attendance at the Belt and Road Forum in Beijing marks his first trip outside the former Soviet Union since an International Criminal Court warrant was issued for him in March. Market performance last week was mixed, with U.S. Treasuries and Fed rate expectations influencing sentiment. Asian stocks ended the week with a 6% rise, while world stocks gained 4.5%, buoyed by the decline in U.S. bond yields.
Key developments on Monday
- Japan industrial production (August)
- Indonesia trade (September)
- India wholesale inflation (September)
As we navigate the week ahead, market participants will closely monitor economic data, political developments, and global market trends to make informed decisions.
