All the Asian markets concluded Tuesday’s trade in green. Japanese stocks jumped on a weakened yen and a report that Prime Minister Shinzo Abe was reviewing a possible corporate tax rate cut in a bid to stoke growth and offset the impact of a national sales tax hike, while Hong Kong shares rose for a fourth straight day amid optimism over the Chinese economy. China shares gained for the third straight day, helped by strength in the financial sector. Chinese property shares added to their recent gains, following report that the eastern city of Wenzhou has become the first to ease restrictions on real-estate purchases. South Korea’s Seoul Composite ended at a one-week high, as large cap firms rallied on bargain hunting. Foreign investors have also bought 162.6 billion won ($146.05 million) worth of shares, snapping a five-session selling streak, to buttress the market.
Japan’s economic growth slowed more than expected in the second quarter, offering ammunition to those seeking to temper a planned sales-tax increase even as government debt has risen past 1,000 trillion yen ($10.4 trillion). But as the sharp slowdown was driven by an unexpected fall in corporate capital spending while personal spending remained hardy, the data may encourage Japanese Prime Minister Shinzo Abe to proceed with the tax hike and soften the pain by offering tax breaks to boost business investment. Separately, Japan’s core machinery orders, seen as a leading indicator of capital spending, fell 2.7% in June. The result beat expectations for a 7.1% drop. Core machinery orders, which exclude volatile purchases for power-generation equipment and ships, can nonetheless vary wildly from month to month: They rose 10.5% in May, fell 8.8% in April, and rose 14.2% in March.
Meanwhile, new home purchases fell to a 25-week low in Shanghai last week as a record heat wave, inadequate supply and continuously high prices jointly crimped buying sentiment. The sales of new homes, excluding government-subsidized affordable housing, dropped 22 percent from the previous seven-day period to 149,100 square meters, the lowest weekly volume registered since mid February. Indonesia Finance Minister Chatib Basri stated that the government is making efforts to boost consumption in order to keep the country’s economic growth above 6% this year. According to Chatib, expenditures related to household consumption dominate the GDP, and they grew by 55.44% in the first half of this year. Gross Capital Formation grew by 32.68%, government consumption by 8.63%, exports by 23.15% and import 25.72%.
Asian Indices | Last Trade | Change in Points | Change in % |
Shanghai Composite | 2106.16 | 4.87 | 0.23 |
Hang Seng | 22541.13 | 269.85 | 1.21 |
Jakarta Composite | 4652.40 | 54.62 | 1.19 |
KLSE Composite | 1795.09 | 10.52 | 0.59 |
Nikkei 225 | 13867.00 | 347.57 | 2.57 |
Straits Times | 3244.12 | 11.88 | 0.37 |
KOSPI Composite | 1913.03 | 28.20 | 1.50 |
Taiwan Weighted | 7986.27 | 82.89 | 1.05 |
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