Chinese Stocks Boosted by Catalysts, Asian Markets Recover By Investing.com
by Ambar Warrick
Investing.com – Chinese stocks rose on Tuesday after the government pledged more measures to support economic growth, while most other Asian stocks recovered modestly from recent losses.
The Chinese company’s index rose 0.5%, while the index added nearly 1%.
Beijing on Monday pledged to ramp up stimulus efforts in the third quarter, as the country grapples with slowing growth in the face of COVID-19 lockdowns and potential energy shortages.
He also announced a reduction in the amount of foreign exchange required to be held by local institutions, indicating that the government plans to prevent further decline.
News of the stimulus helped dispel concerns about China imposing new restrictions on COVID-19 in many cities. Local stocks fell on Monday, as weakness in Chinese markets extended to most other Asian stocks.
Growth has slowed significantly this year, putting pressure on domestic stocks and the yuan. But Beijing has so far been reluctant to roll back its strict non-proliferation policy, which is at the heart of China’s economic woes.
Concerns about more sharp interest rate hikes by the Federal Reserve, after stronger-than-expected data last week, also weighed on most Asian markets at the start of the week.
It traded sideways on Tuesday ahead of a widely expected interest rate hike by the Reserve Bank (RBA) later in the day.
The Reserve Bank of Australia interest rate is expected to reach 2.35% – its highest level in eight years. Investors will also be watching for more signs of policy tightening and inflation from the central bank.
Australian shares slid, while stocks benefited as the Reserve Bank of Australia embarked on a hiking cycle this year to rein in inflation.
It bucked the trend, trading slightly lower after data showed slower-than-expected growth in July. The reading, along with data showing A, indicated more pressure on Japanese consumers from rising inflation.