Asian Stocks Rise on Wall Street Rebound Ahead of Inflation Data | Investing.com
Most Asian stocks saw gains on Tuesday following a rebound in Wall Street, with investors eyeing upcoming inflation data for signals on potential interest rate cuts. Chinese markets, however, lagged behind due to new restrictions on Chinese biotechnology companies by U.S. policymakers. This move, along with other economic indicators, had a negative impact on Chinese stocks.
Despite this, other Asian markets were buoyed by the overnight gains on Wall Street, which helped recover some losses from the previous week. The focus this week is on key consumer price index inflation data that could influence future interest rate decisions.
U.S. stock index futures dipped slightly in Asian trade, indicating a possible stall in the Monday rebound.
In China, the Shanghai and Shenzhen indexes fell to seven-month lows, while Hong Kong's Hang Seng index dropped to a three-week low. This decline was driven by the passing of a bill in the U.S. House of Representatives targeting Chinese biotech firms, leading to losses in companies like WuXi AppTec and Hansoh Pharmaceutical Group.
The bill, part of the Biosecure Act, aims to restrict business dealings with Chinese biotech firms due to potential national security threats. Despite still needing Senate approval, the bill poses a significant challenge to Chinese biotech companies with ties to the U.S.
The impact of this bill spilled over into broader Chinese stocks, exacerbating existing concerns about deteriorating Sino-U.S. relations. Additionally, lackluster economic data for August further weighed on Chinese markets.
On the other hand, broader Asian markets rose in line with Wall Street, with a focus on upcoming inflation data and potential interest rate cuts. Japanese and Australian markets saw gains, while South Korea and India remained relatively flat.
Overall, the global economic slowdown remains a concern for risk-driven markets, with Japanese stocks being particularly affected. Investors are closely monitoring economic indicators and geopolitical developments to navigate these uncertain times.