Asian stocks halt slide on positive China CPI, Nikkei 225 still back on Japan figures

  • Asian stocks see gains on hopeful China data, trade fears easing for now.
  • Japan is still struggling with a sluggish economy, and Machinery Orders declined by much more than was anticipated.

Asian equities started Thursday’s trading off on the wrong foot with most indexes seeing declines in  the early hours of trading on the back of rising trade tensions as the US and China prepare to hurl another volley of trade tariffs at each other, but an unexpected positive showing for China’s CPI and PPI figures helped to halt the skid, while declining industrial purchases in Japan are keeping Japanese stocks on the bearish side.

China’s Consumer Price Index and Producer Price Index moderately bested market forecasts, with China’s y/y CPI actually improving to 2.1% (forecast 1.9%, last 1.9%) while the y/y PPI clocked in at 4.6%, a slight tick lower than the previous reading of 4.7%, but still marginally better than the anticipated 4.4%. Risk appetite in Chinese stocks and associated markets like Australia are on the rise following the reading, with markets regaining some confidence that the current US-China trade war, while set to go on for far longer than most are comfortable with, may not be causing nearly as much damage right out of the gate as previously thought.

In Japan, Machinery Orders declined by a rapid -8.8% in the wee hours of Thursday’s markets, far below the expected -1.3% and accelerating declines from the previous reading of -3.7%, and Japanese indexes are back for the day while the broader Asia-Pacific enjoys a welcome snap from regular down days.

Japan’s Nikkei 225 and Tokyo’s Topix index are both in the red for about 0.30% so far for today, with Australia’s ASX 200 up about 0.70% and Hong Kong’s Hang Seng index showing green for 0.80%, while Shanghai’s CSI 300 index is seeing a stellar rebound from recent losses, bounding up by 2.30% for Thursday.

Nikkei 225 levels to watch

The Nikkei is trading into 22,650.00 after managing to break out of recent swing highs, but still remains trapped by resistance from the last significant swing high at 22,950.00, just shy of the 23,000.00 major technical handle, while current downside action is beginning to see plenty of support from this week’s low of 22,465.00 and July 23rd’s bottom at 22,340.00.

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