In Asian markets, stock prices have risen, primarily due to the announcement by Chinese authorities that they will introduce new measures to stimulate capital markets.
The MSCI index for the Asia-Pacific region was up 1.4 percent around 7:00 AM. Meanwhile, the Nikkei index on the Tokyo Stock Exchange strengthened by 1.6 percent, while stock prices in Australia, South Korea, Hong Kong, and Shanghai rose between 0.6 and 2.3 percent.
Chinese stock indices saw the highest gains this morning as local authorities announced a reduction in trading fees in capital markets to encourage the rise of stock prices, which are hovering near their lowest levels this year. However, this will stimulate the capital market but not the real economy, which continues to grow significantly slower than expected after the lifting of restrictive COVID measures.
This morning, it was reported that profits in the Chinese industrial sector fell for the seventh consecutive month in July, down 6.7 percent year-on-year.
– The new measures are aimed at reviving the capital market, but do not represent a significant stimulus for accelerating the real economy – analysts from the brokerage firm Nomura wrote in their market outlook.
In other Asian markets, trading is more cautious as U.S. Federal Reserve Chairman Jerome Powell stated on Friday that the Fed is prepared to raise interest rates further as inflation, despite easing in recent months, remains above target levels. As a result, this week, investor focus will be on reports regarding inflation and employment in the U.S., which could significantly impact market direction.
