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EQUITIES: Asian Equities Edge Lower Following China Stimulus Update

EQUITIES
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Asian equities have started the week on the back foot driven by disappointment over China’s debt swap program, which investors found insufficient to address economic concerns. Persistent deflationary pressures in China and a drop in foreign direct investment further weighed on sentiment. Additionally, the US directive to halt advanced chip shipments to China hit stocks like Tencent and Taiwan Semiconductor. Weak commodity prices, particularly in crude oil, iron ore, and copper, dragged down Australian miners, exacerbating the region’s losses.

  • Japan's major benchmarks are slightly lower today, with the TOPIX -0.30% with Real Estate the worst performing, followed by materials as commodity prices fall. The Nikkei 225 is performing slightly better although still trades 0.10% lower, consumer discretionary stocks are higher following a 6.40% jump from Sony following the company posting better-than-expected operating profit for second quarter. Operating income 455.08b yen, +73% y/y, estimate 335.31b yen. Suzuki is also 5.10% higher following a 43.9% rise in attributable profit to 217.45b yen for the first half of the fiscal year 2024.
  • There has been decent selling by foreign investors of South Korean equities today, largely focus on the tech sector, with Samsung down 3.30%, while SK Hynix is 3.40% lower, the KOSPI is 1.10% lower. Taiwan equities are off earlier lows, although the TAIEX still trades down 0.60% for the session, with TSMC about 1% lower.
  • Australian equities are lower, led by sharp declines in mining stocks following disappointment over China's underwhelming debt relief program. Major miners like BHP, Rio Tinto, and Fortescue dropped significantly due to concerns about weaker Chinese demand and falling commodity prices. Goldminer Resolute Mining plunged over 28% after its CEO and two executives were taken captive in Mali. The ASX 200 closed 0.35% lower. New Zealand's NZX 50 closed 0.66% lower.
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Asian equities have started the week on the back foot driven by disappointment over China’s debt swap program, which investors found insufficient to address economic concerns. Persistent deflationary pressures in China and a drop in foreign direct investment further weighed on sentiment. Additionally, the US directive to halt advanced chip shipments to China hit stocks like Tencent and Taiwan Semiconductor. Weak commodity prices, particularly in crude oil, iron ore, and copper, dragged down Australian miners, exacerbating the region’s losses.

  • Japan's major benchmarks are slightly lower today, with the TOPIX -0.30% with Real Estate the worst performing, followed by materials as commodity prices fall. The Nikkei 225 is performing slightly better although still trades 0.10% lower, consumer discretionary stocks are higher following a 6.40% jump from Sony following the company posting better-than-expected operating profit for second quarter. Operating income 455.08b yen, +73% y/y, estimate 335.31b yen. Suzuki is also 5.10% higher following a 43.9% rise in attributable profit to 217.45b yen for the first half of the fiscal year 2024.
  • There has been decent selling by foreign investors of South Korean equities today, largely focus on the tech sector, with Samsung down 3.30%, while SK Hynix is 3.40% lower, the KOSPI is 1.10% lower. Taiwan equities are off earlier lows, although the TAIEX still trades down 0.60% for the session, with TSMC about 1% lower.
  • Australian equities are lower, led by sharp declines in mining stocks following disappointment over China's underwhelming debt relief program. Major miners like BHP, Rio Tinto, and Fortescue dropped significantly due to concerns about weaker Chinese demand and falling commodity prices. Goldminer Resolute Mining plunged over 28% after its CEO and two executives were taken captive in Mali. The ASX 200 closed 0.35% lower. New Zealand's NZX 50 closed 0.66% lower.