- Chinese Premier says “tough struggle” for China due to a challenging environment
- Asian markets traded mixed on Tuesday
- Australia, Japan, and South Korean markets also record losses
The Asian stock markets traded mostly flat on March 5, 2019, with slight gains recorded in the Chinese markets on the back of the kick-off of its annual parliamentary meeting, reports CNBC.
Increasing tension surrounding the US-China trade war seems to have engulfed the stock markets the world over, as Asian markets traded mixed on Tuesday.
Most notably, the Chinese Premier Li Keqiang said the country must be prepared for a “tough struggle” as it faces a complex business environment.
However, the market soared higher during the early morning session, with the Shenzhen component and the Shanghai composite up by 0.814 and 0.11 percent, respectively. Similarly, upward traction in the movement was also observed in the Shenzhen composite which surged by 0.748 percent. Hong Kong’s Hang Seng index, however, traded flat.
A Sluggish Year for Chinese Economy?
Chinese Premier Keqiang’s words surrounding the current state of Chinese growth might have prevented the bulls from pulling the markets further up. Keqiang added that the revised official economic growth target for China is now 6.0 to 6.5 percent, which is on the lower side compared to the 2018’s 6.6 percent target. Interestingly, China’s growth target for 2019 is also its lowest since 1990.
Andrew Collier, managing director at Orient Capital Research, told CNBC’s “Street Signs” on Tuesday:
“I think the bigger point here is that they’re trying to essentially avoid crashing the economy with excess debt while avoiding a very severe downturn in economic activity.”
Per analysts at Rakuten Securities Australia, a trade deal with the US coupled with a domestic stimulus could do wonders for the global investors’ sentiment towards the growth of the Chinese economy. The FX retail brokerage firm stated in a note:
“At the moment we’re still in a ‘wait and see’ situation but this week could see the first part of that equation put in place.”
Performance of Other Asian Stock Exchanges
Following the movement in the American stock markets, major Asian stock exchanges also recorded slight losses with most of the trading in the red.
Japan’s Nikkei 225 plunged 0.48 percent from its last closure, with shares of Softbank Group and Topix falling by 2 and 0.60 percent, respectively.
Australia’s ASX 200 declined 0.33 percent in afternoon trade with losses recorded in almost all of the sector indices.