MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.22% in early trade, tracking a decline in Chinese assets
Asia shares dropped on Wednesday on the back of weakness in China.
Gold advanced to an all-time high as jitters over the close U.S. presidential race supported the yellow metal, while bitcoin also flirted with a record high as markets weigh the prospect of a victory by Republican candidate Donald Trump.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.22% in early trade, tracking a decline in Chinese assets.
The CSI300 blue-chip index dropped 0.16%, while Hong Kong’s Hang Seng Index slipped 0.64%.
The moves came even as Reuters reported on Tuesday that China is considering approving next week the issuance of more than 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its economy.
China’s latest stimulus package appears underwhelming, with 60% allocated to local government debt relief, according to Saxo’s chief investment strategist Charu Chanana.
While there is a stronger focus on supporting the property sector, urgency around wider structural issues – such as debt, deflation, and demographics – remains limited, Chanana said.
Equity support could offer some lift to domestic confidence, but foreign investors are still highly concerned about potential tariff threats if next week’s U.S. elections result in a Republican sweep, she said.
China’s new energy vehicles index rose 0.2%, largely unfazed by news that the EU has decided to raise tariffs on Chinese-built electric vehicles to 45.3%.
Meanwhile, U.S. stock futures gained, buoyed by a solid result from Google-parent Alphabet, which reported quarterly revenue that beat estimates.
Nasdaq futures added 0.42%, while S&P 500 futures gained 0.36%.
Meta Platforms and Microsoft report their earnings later in the day, followed by Apple and Amazon.com on Thursday.
Investors will be closely watching the results to determine whether Wall Street can sustain the optimism around technology and AI that has lifted indexes to record highs this year.
Elsewhere, Japan’s Nikkei gained almost 1%, riding on the momentum of a softer yen.