Marketmind: China's stock flame fizzling already?
By Jamie McGeever
(Reuters) — A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.
Asian markets look set to open on a fairly strong footing on Tuesday, supported by a global equity upswing and lower bond yields but tempered by caution surrounding the latest efforts from Beijing to support the Chinese stock market.
The Asian economic calendar is light, with only Japanese unemployment and the latest industrial production, trade and inflation figures from Vietnam on tap. Trading volumes should return to more normal levels with UK markets open again.
The reaction of Chinese stocks on Monday to new measures from Beijing to boost local markets at once emboldened the bull and bear cases — bulls will point to the rise of more than 1% for the best day in a month, while bears will note that stocks had risen 5.5%, so the close was extremely lackluster.
Despite the latest steps to boost confidence, foreign investors offloaded a net 8.2 billion yuan ($1.12 billion) of Chinese stocks via the Stock Connect on Monday, and have now been net sellers in 15 out of the last 16 sessions.
This helps explain why the yuan remains under sustained downward pressure, languishing around the weakest level of the year against the dollar near the key 7.30 level. A break below that will take the yuan into territory not recorded since late 2007.
Staying in China, a raft of top-tier companies this week release corporate earnings reports, including conglomerate CITIC, financials Bank of China and ICBC, and beleaguered property developer Country Garden.
Fellow real estate developer China Resources Land publishes half-year results on Tuesday, while Evergrande shares trade for a second day after Monday's long-awaited
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