Asian Stock Market: Mixed trading amid US interest rate concerns, Chinese debt crisis
- Asian stock markets trade mixed on Thursday amid concern about US inflation fear, Chinese debt crisis.
- Fitch Ratings might reconsider China's A+ sovereign credit rating in the face of intensifying economic headwinds.
- Japanese equities trade lower after the unexpected trade deficit data in July.
Asian equities trade mixed followed Wall Street lower on Thursday following the release of minutes from the Federal Open Market Committee (FOMC) meeting. Investors are concerned about mounting evidence of China's deterioration and the possibility of rising US interest rates.
The Federal Open Market Committee (FOMC) Minutes emphasised that inflation remained unacceptably high and may need additional tightening of monetary policy. This, in turn, weighs on regional stock equities and risky assets on Thursday.
At press time, China’s Shanghai is up 0.01% to 3,150, the Shenzhen Component Index rises 0.46% to 10,628, and Hong Kong’s Hang Sang falls 0.12% to 18,308. India’s NIFTY 50 declined 0.29%, South Korea’s Kospi dips 0.45%, and Japan’s Nikkei loses 0.38%.
In China, stock markets trade in negative territory for the fifth consecutive day. On Wednesday, the Chinese House Price Index for July decreased to -0.1% from 0% prior. The data raises fears about a potential Chinese property catastrophe, especially as large developer Country Garden Holdings struggles to pay its loan commitments. Furthermore, Fitch Ratings might reconsider China's A+ sovereign credit rating in the face of intensifying economic headwinds.
In Japan, the Nikkei 225 trades lower following the country's unexpected trade deficit in July. In addition, Japan's exports decreased for the first time in two years, with a significant decline in shipments to China.
Moving on, market participants will closely watch the headlines surrounding China’s economic woes. The US weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey for August will be due later in the day. Also, the annual Japanese National Consumer Price Index for July will be released on Friday. The events could provide hints for further Fed monetary policy and give a direction for riskier assets like equities, risk-sensitive currencies, etc.