Beijing on Sunday announced it would halve the stamp duty on stock trading in the latest effort to support the struggling market and revive investor confidence
Asian shares were marginally higher on Monday as China announced new measures to support its ailing markets, though the mood was wary ahead of data on U.S. jobs and inflation.
Beijing on Sunday announced it would halve the stamp duty on stock trading in the latest effort to support the struggling market and revive investor confidence.
The support was required given profits at China’s industrial companies dropped 6.7 per cent in July from a year back, expanding this year’s slump to a seventh month.
Chinese blue chips declined 2 per cent last week to reach its lows for the year so far, and all eyes will be on the official PMI for August out on Thursday.
MSCI’s broadest index of Asia-Pacific shares outside Japan strengthened 0.2 per cent, having eked out minor gains last week to break a three-week losing streak.
Japan’s Nikkei advanced 0.9 per cent, underpinned in part by the continuing weakness of the yen.
S&P 500 futures gained 0.1 per cent and Nasdaq futures 0.2 per cent, extending last week’s moderate increase.
The market did manage to weather a slightly hawkish outlook from Fed’s Jerome Powell, who restated they might have to hike rates again but promised to move “carefully”.
We take this to mean that the Federal Open Market Committee doesn’t plan to hike at the September meeting, wrote analysts at Goldman Sachs.
We continue to expect that the Federal Open Market Committee will eventually decide that further policy tightening is unnecessary, making the hike at the July FOMC meeting the last of the cycle, they added.
Futures imply around an 80 per cent chance of a steady outcome at the September 20 meeting, and a 54 per cent probability of a hike by year end.