There is no headway for Asian stocks with them falling for a fourth day today; except for the Japanese stocks none is faring better. Whereas the MSCI Asia Pacific Index (excluding Japan) fell by 0.2 percent in London, Hong Kong’s Hang Seng Index dived 0.4 percent. The MSCI Asia Pacific’s loss is continuing and all set to become the longest stretch of losses in more than two months.
Following the trend, Taiwan’s benchmark equity measure also fell 1.1 percent. Whereas Euro Stoxx 50 futures gained 0.2 percent when Standard & Poor’s 500 Index contracts were little changed, benchmarks in Singapore and Australia gained to some extent. On the other hand, stocks in Hong Kong, China, South Korea and India fell marginally.
However, the Shanghai Composite Index gained 0.4 percent and reversed losses of 1.2 percent amidst the news that agricultural companies are rallying on speculation the government will introduce reforms which are all intended to encourage the industry. The decision is likely in the Communist Party meeting which is going to be held in couple of days.
On bright note, Heilongjiang Agriculture Co. and Zhongken Agricultural Resource Development Co. fared better and gained more than their daily limit of 10 percent. However, against the trend, Industrial Bank Co. fell 2 percent as China’s banking regulator urged lenders to handle credit risks in industries with overcapacity problems.
Following the trend, real estate company, Poly Real Estate Group Co. fell to an extent when the news came that Beijing city won’t allow developers to increase home prices before the year-end.
Japanese Stocks Changed Little
On a dismal trading day, Japan’s Topix index ended little changed where Nissan Motor Co. plunged 10 percent. Japan’s third-largest carmaker by market value, Nissan cut its net-income forecast which discouraged investors to an extent. Similarly, Komatsu Ltd., a construction-equipment maker lost 1.6 percent.
A Lot Depends on Tapering of Stimulus by the Fed
Market observers are waiting for any decision on the part of the Fed as according to them it will have great impact on the global economies. However, the U.S. economic data may influence the Federal Reserve’s decision to taper its stimulus wherein $85 billion in monthly asset purchases have supported economic recovery.
The Fed has kept interest rates low so that stock indexes, including the main U.S. markets, are able to do better amidst the economic slowdown. It has been injecting dollars into the U.S. economy without thinking that it may lead to inflation.
To contact the reporter of this story: Jonathan Millet at email@example.com