© Reuters
Investing.com – Asian stocks were flat on Tuesday amid lingering fears about slowing economic growth in China; in India, however, Indian stocks aimed for new highs on the back of a positive earnings season.
Regional financials were bought ahead of key results from some of America’s largest banks this week, including Bank of America (NYSE:), Morgan Stanley (NYSE:) and Goldman Sachs (NYSE:).
Wall Street indices also closed higher overnight, offering some buoyancy for local stocks.
But that was largely offset by weak Chinese economic indicators after data showed the country’s growth slowing in the second quarter. The reading triggered steep losses in Chinese stocks, which lasted into Tuesday.
Chinese stocks fall again, eyes on stimulus measures
Hong Kong’s index was the worst in Asia on Tuesday, dropping nearly 2% after trading was halted on Monday due to a passing typhoon.
Losses were concentrated in locally listed Chinese property and technology stocks, with the big names including Baidu (HK:) (NASDAQ:), Alibaba Group Holding Ltd (HK:) (NYSE:) and Tencent Holdings Ltd (HK:) ) which suffered a heavy dose of profit taking after last week’s strong gains.
Chinese indices and also fell about 0.4% each, extending Monday’s losses. But the pace of losses has slowed as weak economic data has raised expectations of further stimulus measures in China.
Local media indicated that the People’s Bank of China suggested it could cut key interest rates and bank reserve requirements in the third quarter to unlock more liquidity. In recent weeks, PBOC officials have also announced increased political support.
But worries about a slowdown in China weighed on most Asian markets. The South Korean index and index lost 0.4% each, while the Japanese index fell slightly after a long weekend.
The Aussie fell 0.4% as minutes from the Reserve Bank’s July meeting showed the central bank is still considering further rate hikes, despite a pause earlier in the month.
Indian shares at all-time high on positive earnings
Singapore-traded Indian index futures indicated a soft open on Tuesday after both the Nifty and the hit all-time highs in the previous session.
The strength of conglomerate Reliance Industries Ltd (NS:), prior to the spin-off of its financial services unit, and the rally in banking stocks, following strong results from lender HDFC Bank (NS:), boosted highest on Monday.
Strong foreign capital inflows, optimism about the Indian economy and strong start to the second quarter earnings season were the main factors driving the local equity market rally over the past month.
But analysts have warned that any negative news could trigger a sharp capitulation in Indian stocks.