Across Asia, watchers have noted a mixed performance in national markets as trading ended on Wednesday, July 14th. This shakiness appears to have been caused by China’s recent economic report where it stated that its economic growth had slowed down considerably over the previous quarter.
China posted an annual growth rate of 7.9% at the end of Q2-2021, a significant drop from the 18.3% posted earlier this year. Analysts say that this is a reflection of how the country’s early recovery has been leveling off.
According to ActivTrades’ Harpreet Bhal, investors have not reacted adversely to this development. However, he opined that investors would be keeping a keen eye on how China will be easing its economy from monetary and fiscal issues, particularly throughout the second half of the year. Bhal went on to say that there are concerns regarding overall growth over the next six months, particularly because of a boost in international commerce earlier this year.
Reactions in regional markets were mixed at best. The Hang Seng index in Hong Kong was up by 1.2% at 28,115.98, and the Shanghai Composite is currently at 3.543.17, up by 0.2%. The South Korean KOSPI also posted a gain of 0.3% at 3,543.17.
Both Australia and Japan experienced a slight drop in their respective markets. The former’s S&P/ASX 200 closed at 7,352.60, down by 0.1%. Meanwhile, Japan’s Nikkei 225 was down by 0.9%, closing at 28,343.83.
Over in the United States, investors were also showing ambivalence towards the latest earnings reports from sectors that have been adversely affected by the pandemic such as airlines and banks. In addition, market watchers are also bracing themselves for an expected rise in inflation after the US Federal Reserve stated that the recent increase in costs might be temporary.
As a result, investors are focusing on earnings. However, many are erring on the side of caution. According to CFRA chief investment strategist Sam Stoval, it’s much too early to increase rates as this might cancel out any gains made in the early days of economic reopening.
Recent gains have also been minimal in the US markets. The S&P 500 managed to close at 4,374.30 – up by barely 0.1% – having lost its momentum late in the day. The Dow Jones Industrial Average also posted a gain of 0.1% to close at 34,993.23.
Meanwhile, the Nasdaq was down by 0.2%, closing at 14,644.95 despite strong performances by various tech companies throughout the day. The Russel 2000 posted a loss of 1.6%, closing at 2,202.36.