In recent days, China’s regulators have announced further curbs on short selling and state investors said they were expanding their stockbuying plans
Asian stocks firmed on Wednesday as investors waited to see if Beijing’s increasingly frantic attempts to prop up its sagging share markets would actually work, while bonds saw a reprieve from recent selling.
In recent days, China’s regulators have announced further curbs on short selling and state investors said they were expanding their stockbuying plans.
According to Bloomberg News, President Xi Jinping would discuss the stock market with financial regulators, though there was no confirmation this had happened or what was discussed.
Nevertheless, the jury is very much out on how effective all this will prove and the blue chip index edged up 0.2% in choppy early trade, while Shanghai stocks gained 0.1%.
Markets have shown that their bar to turning more optimistic about the economy has been high, said Galvin Chia, emerging markets strategist at NatWest. There is also considerable uncertainty around what the government’s longer-term approach is towards markets.
What I am wary of is a short term bounce gets quickly unwound as onshore markets return after the Lunar New Year break, Chia added.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.7% to a five-week top, helped by a 1.8% rise in South Korea. Japan’s Nikkei slipped 0.1%, but was off early lows.
EUROSTOXX 50 futures gained 0.2% and FTSE futures 0.3%.
S&P 500 futures strengthened 0.1% and Nasdaq futures advanced 0.2%. Companies reporting earnings on Wednesday include Uber, Walt Disney and PayPal.
The banking sector remained a concern as Moody’s downgraded New York Community Bancorp to junk citing pressure on its funding and liquidity.
The timing of U.S. rate cuts was no clearer after Fed Presidents Loretta Mester and Neel Kashkari welcomed the progress on inflation but hinted there was more work to do before policy could be eased.