In light of the market’s caution, Asian stock markets on Wednesday trade in a mixed bag. Fear of rising interest rates in the US and high US yields are keeping Asian stock markets under pressure. Investors are waiting for the US PMI data, which is coming later on Wednesday, for a new boost.
Decline in China’s Index
Shenzhen Component Index drops 1.11% to 10,259, Shanghai drops 0.55% to 3,103 in China, and Hang Sang in Hong Kong rises 0.38% to 17,854. The NIFTY 50 in India is down 0.1%, the Kospi in South Korea is down 0.55%, the Nikkei in Japan is up 0.17%, and the Weighted Index in Taiwan is up 0.73%.
Before leaving for China, US Commerce Secretary Gina Raimondo met with Chinese Ambassador Xie Feng, according to a statement released by the US Commerce Department late on Tuesday, according to Reuters. The US-China relationship is still in the news, and the rekindled hostility between the two biggest economies in the world may put pressure on the local stock market.
China’s slump and the concern of other countries
Due to weak consumer spending and a deteriorating real estate downturn, China’s economy has lost momentum, leading to requests for further stimulus measures from the government. However, Chinese officials are apprehensive about raising the country’s borrowing requirements. This in turn increases worries about the decline in the Chinese economy and its impact on other nations.
What’s happening with Japan?
According to the most recent figures, Japan’s industrial activity declined in August for the third straight month. According to preliminary statistics from Jibun Bank, the manufacturing PMI for Japan rose to 49.7 in August from 49.6 in July. The outcome fell short of the predicted 49.5. While over the same time period, the Service PMI increased from 53.8 to 54.3.
India’s hike yet concern
The NIFTY 50 index for India is one of the best-performing emerging stock markets. The rise has, however, come to an end because of concerns about rising US interest rates and China’s slow economic recovery.
Hence in conclusion
Investors will pay particular attention to US S&P Global PMI data that will be released later in the North American session. Later in the week, the focus will shift to Friday’s address by Fed Chair Powell and the annual Jackson Hole symposium on Thursday. The speech may offer insights into the state of the economy and clues as to whether inflation is under control or if further interest rate increases are needed to battle it.