Most of stocks opened lower in Asia on Wednesday as mainland Chinese markets were affected by sell offs late in the day.
Japan’s benchmark Nikkei 225 Stock Average climbed 0.2 percent to end at 16,906.54, while Australia’s Standard & Poor’s ASX 200 surged 0.5 percent to 5,216.
However, most regional markets dropped. South Korea’s Kospi declined 0.3 percent to 2,005.83, while Hong Kong’s Hang Seng plunged 1.3 percent to 21,164.78. Shanghai Composite Index fell 2.6 percent to 2,964.89, losing by over 4 percent before regaining some of its losses.
As stated by an economist, “Volatility in Chinese equities will still be very high, causing investors to be more cautious in other developing countries’ markets. We would see some selling pressure on some shares in the region after the current rallies to lock in profit.”
China’s coming monetary policy will stay away from encouraging firms to take on more debt and will consider the effect of money supply on prices.
As reported by an economist, “Aside from continuing to support steady economic growth, future monetary policy will focus on guarding against macroeconomic risks, especially avoiding rapid growth in companies leverage, and will also consider the impact of increased loans on the cost of living and real estate prices.”
The European Central Bank’s governing council will meet as market players are focusing on what President Mario Draghi statement is regarding the news conference later this week.
Reluctance has reign over the stimulus gauges the bank has taken are actually working, such as reducing interest rates and expanding a government bond buying.
According to a market analyst, “Sentiments will be driven by the ECB President Draghi when he speaks. In his previous speech, Mr. Draghi hinted that the deposit rate wont be cut further into negative territory.”
“However with persistent low inflation and the euro now trading at six-month highs, Mr. Draghi could possibly backtrack on his previous statement and consider a further rate cut to fight deflationary pressure,” the analyst added.
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