China’s Stocks Fall and Futures Underperform in Asia – Asia Market Wrap

Due to Beijing’s hesitation to commit to further stimulus and the lacklustre economic data, Chinese shares were the clear underperformers in Asia on Wednesday.

After falling as high as 7.4%, the benchmark CSI 300 Index recovered some of its losses following news that China will offer a briefing on fiscal policy on Saturday. After their return from the Golden Week holiday, Chinese markets were on the rise on Tuesday.

In response to a story indicating that the US Justice Department was considering dismantling Google, US equities futures also declined. After plunging to its lowest level in almost a year, oil prices stabilised and ten-year Treasury rates stayed close to the crucial 4% mark.

Concerns in China have mounted that the latest burst of stimulus may be insufficient to convince investors of a sustainable rally in the equity market. Chinese tourists shelled out less money during their long holiday while a news report indicated the nation needs to introduce policies to stabilize growth and expectations. That’s a further sign Beijing is attempting to build confidence among investors.

Elsewhere in Asia, the New Zealand dollar and bond yields fell as the country’s central bank cut its benchmark rate by 50 basis points, while the RBI kept rates constant. The RBI adjusted its monetary policy to neutral, sending stocks up. South Korea will join the FTSE Russell benchmark bond index, capping months of official advocacy and a major upgrade of financial market infrastructure.