Asian stock markets are trending positively, except for China, as inflation data coming in below expectations in the US has alleviated concerns that the US Federal Reserve (Fed) will raise interest rates, and technology stocks have risen.
According to data released yesterday in the USA, inflation in the country decreased by 0.4 percent on a monthly basis in June and increased by 3.5 percent on an annual basis. Both data were below market expectations. Following the data, expectations that the Fed would raise interest rates at its July meeting dropped significantly. This situation increased the risk appetite in global markets.
On the other hand, Fed President Kevin Warsh emphasized on the first day of his presentation at the session held at the House of Representatives Financial Services Committee that they will not tolerate persistently high inflation and that they are determined to restore price stability.
CHINA GROWTH FIGURES
In addition to the data coming from the USA, macroeconomic data announced in the region are also in the focus of investors. The Chinese economy grew by 4.3 percent on an annual basis in the second quarter of the year, driven by weak domestic demand and risks originating from the Middle East. This data was below market expectations.
This rate recorded in the country’s economy, which grew by 5 percent in the first quarter, stood out as the lowest growth in the last 3.5 years. Strong industrial production and export performance were insufficient to limit the impact of weakness in consumption and investments.
In the country, retail sales increased by 1 percent on an annual basis in June and industrial production increased by 5.3 percent, better than expectations.
Analysts stated that policy regulations may be on the agenda to support economic activity, but a comprehensive incentive package does not seem likely, and that investors’ focus has turned to the Chinese Communist Party (CCP) Central Committee meeting, which is expected to be held at the end of the month.
The rise in technology stocks in the region is also noteworthy. Shares of SK Hynix, traded on the South Korean stock exchange, gained 8.8 percent in value. Shares of another South Korean company, Samsung Electronics, also increased by 6.3 percent following news that the company was reviewing its plans for an initial public offering on the New York Stock Exchange.
With these developments, the Kospi index in South Korea increased by 6.2 percent and closed at 7,284 points, and the Nikkei 225 index in Japan closed at 68,755 points with a 1.5 percent gain in value.
In China, the Shanghai composite index is trading at 3,952 points with a 0.4 percent decrease, in Hong Kong the Hang Seng index is trading at 24,639 points with a 1.2 percent gain, and in India the Sensex index is trading at 77,514 points, 0.6 percent above the previous close.
