© Reuters
Investing.com – Most Asian stocks moved in a flat to lower range on Tuesday amid persistent concerns about slowing economic growth in China, while Indian stocks eyed new highs on the back of a positive earnings season.
Regional financial stocks saw some buying ahead of major earnings from some of the largest US banks this week, including Bank of America (NYSE: ), Morgan Stanley (NYSE:) and Goldman Sachs (NYSE:).
Wall Street also closed higher overnight, providing some positive signs for local stocks.
But this was largely offset by weak economic indicators from China, after data showed that growth in the country slowed in the second quarter. The reading caused heavy losses in Chinese stocks, which extended into Tuesday.
Chinese stocks fall further, stimulus measures in focus
The Hong Kong index was the worst performer in Asia on Tuesday, dropping nearly 2% in a catch-up after bad weather halted trading on Monday.
The losses were concentrated in domestically listed Chinese real estate and technology stocks, with heavyweights including Baidu (HK:) (NASDAQ:), Ali Baba Group Holding Ltd (HK:) (NYSE) and Tencent Holdings Ltd (HK::) saw a heavy dose of profit-taking after strong gains last week.
Chinese and indices also fell about 0.4% each, extending losses from Monday. But the pace of losses slowed somewhat as weak economic data raised expectations for more stimulus measures in China.
He suggested that the People’s Bank of China cut key interest rates and bank reserve requirements in the third quarter, to unlock more liquidity. People’s Bank of China (PBOC) officials have also signaled more political support in recent weeks.
But concerns about a Chinese slowdown weighed on most of the broader Asian markets. The South Korean index fell 0.4% each, while the Japanese index fell slightly after a long weekend.
Australia fell 0.4% as minutes from the Reserve Bank’s July meeting showed the lender is still considering further rate hikes, despite stopping earlier this month.
Indian stocks posted record highs amid positive earnings
Singapore-traded India index futures indicated a flat open on Tuesday, following both Nifty and record highs made in the previous session.
strength in agglomeration Reliance Industries Ltd (NS:), ahead of the financial services unit’s spin-off, and a rally in bank stocks, following strong results from HDFC Bank (NS:), were the biggest drivers of Monday’s gains.
Strong foreign capital inflows, optimism about the Indian economy and a strong start to the second quarter earnings season were the biggest drivers of the local stock market rally over the past month.
But analysts warned that any negative news could lead to a significant amount of capitulation in Indian stocks.