As China Support Is Unsatisfactory, Asian Stocks Fall – Asia Market Wrap
Asian markets fell after some investors saw China’s debt exchange program as insufficient, and statistics revealed that the world’s second largest economy is still experiencing deflationary pressure.
A index of the region’s shares fell as high as 1.3%, led by heavyweights like Tencent Holdings and Meituan. China’s CSI 300 index dropped as much as 1.4% before recovering to trade slightly higher. An index of Chinese companies listed in Hong Kong fell 1.6%.
The broad weakening underscores persistent concerns about the world’s second-largest economy, after Beijing announced a 10 trillion Yuan ($1.4 trillion) initiative to alleviate local governments’ debt risk but refrained from launching new fiscal stimulus. In addition to low inflation, attitude towards China is deteriorating as foreign direct investment continues to decline.
Following Trump’s election, UBS cut its 2025 growth prediction for China, forecasting “around 4%” growth in 2025 and a “considerably lower” rate in 2026.
Oil fell for the second day in a row as a bleak outlook for top importer China weighed on the market, while iron ore slumped near $100 per tonne.
