Asian stocks lack direction

While the US was closed for Martin Luther King Day, yesterday, Asian markets had to contend with China’s economic data and the weak-end to European trading. Asian equity markets are likely to be mixed and muted in today’s trading as well.

China’s GDP, manufacturing and retail sales data confirmed suspicion of a slowdown. There are many research reports touting the structural challenges of the country such as, high debt-to-GDP ratio, slowing industrial output and the tighter investment spending.

Although, speaking to businesses in China did provide evidence that not all is negative. After decades of double-digit growth, there is an urgent need to address the problems created from pollution and the local government debt. This scenario is similar to the start of last-year, there has been an adjustment to the low-side on where Chinese growth will be for the rest of the year.

As for the rest of Asia, Thailand’s political unrest continues to spiral downwards due to the increasing violence. The latest grenade attack has prompted calls for a possible military coup. Prime Minister Ying luck Shinawatra’s party has control of the rural areas, while opposition leader Suthep Thaugsuban has support from the middle-class in Bangkok.

This means the opposition leader will not be able to win the election that Yingluck has called for next month. It would be fair to conclude that the situation does not appear to be anywhere near a resolution. Despite the resilience of the baht and SET so far, prolonged unrest will eventually affect the financial markets in adversely. At the start of the year, there were foreign fund inflows entering Thailand’s equity markets, the latest data showed a net negative of -$19.6m for the month as at 20 January.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.