Chinese Shares On A Path To Hit Three-Year High Amid Stimulus Hopes; Global Markets Cautious on Trump Tariff Threat – Asia Market Wrap
Chinese shares are on course for their best close in three years as investors speculate about more measures to ease deflationary pressures and stimulate the economy. Copper futures fell in London on President Donald Trump’s latest tariff threat.
The Shanghai Stock Exchange Composite Index rose as much as 0.4% to the highest level this year, and are set for their highest close since January 2022. The CSI 300 index – a closely watched indicator of mainland China shares – is on course for its best closing level since December. China’s factory deflation persisted into a 33rd month while consumer prices unexpectedly rose in June, data showed Wednesday.
Meanwhile, Asian shares dipped a modest 0.1% as investors refrained from taking risky bets after Trump ratcheted up trade tensions. Treasuries fell for a fifth session as demand for long-term government debt across the globe waned amid a flurry of bond auctions this week. The Dollar edged higher.
The still-weak inflation may keep pressure on Chinese policymakers to ramp up stimulus to escape a vicious cycle of falling prices, business profits and wages. Investors are turning their focus to Beijing’s July Politburo meeting, for more forceful support measures after the government announced recent efforts to reduce factory overcapacity.
Elsewhere, traders are holding back as they gauge the impact of escalating trade tensions, looking for signals on where stocks might head next after reaching record highs last week. Trump showed a renewed determination Tuesday to push ahead with his plans to heavily tax imports after a slew of tariff warning letters on partners such as South Korea and Japan.
