Asia stocks struggle even as China slashes rates
interest rate cut in China failed to excite investors jaded at the lack of bigger stimulus measures.
China's five-year loan prime rate was lowered by 25 basis points to 3.90%, bigger than the five to 15 bp cuts forecast by economists. The Shanghai Composite, however, fell 0.7% in early trade and blue chips fell 0.6%.
«It is a significant cut, showing policymakers are serious,» said OCBC foreign exchange strategist Christopher Wong, and ought to support currencies such as the Australian dollar.
«But it remains to be seen if it is sufficient to keep momentum sustained,» he said.
«Markets are still on the lookout for more fiscal support measures, in particular targeting consumption.»
The yuan was steady at 7.1972 per dollar. Elsewhere Japan's Nikkei opened flat to stay below but close to topping its 1989 record high. [.T]
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1%, pulling away from its highest level since January touched during Monday. South Korean shares fell 1%.
U.S. Treasury yields ticked up, as trade resumed following Monday's U.S. holiday. S&P 500 futures were 0.2% lower.
Outside China global markets are smarting a little as traders have sharply scaled back bets on U.S. rate cuts following high readings on producer and consumer prices.
Economic indicators, on which this week is a little bit light, are likely to drive the next move.
«The markets started January expecting six cuts from the Fed and we are now pricing in just three,» said Bob Savage, head of markets strategy and
