Investing.com - Asian stocks are poised for an upswing Tuesday, riding on the crest of Wall Street advances and China's increased backing for its beleaguered real estate sector.
Future indices in Japan, Hong Kong, and Australia show a promising incline of over 0.5%, while US-listed Chinese shares surged by 1.2%. This implies more significant shifts in Asian markets compared to Monday’s modest 0.2% uptick in the S&P 500 Index and a slight upward nudge for Nasdaq 100.
Asia-based traders who have been anticipating robust measures from Beijing to invigorate its lukewarm economic revival will likely hail the news that two Chinese regulators have escalated pressure on financial establishments to soften conditions for property firms by promoting negotiations to prolong outstanding loans.
China’s economic difficulties are sending ripples across global markets; this week saw Rio Tinto's(ASX:RIO) chairperson caution about potential repercussions on industrial metals demand.
These hurdles coincide with other nations grappling with their own issues — namely escalating inflation rates and surging interest rates — including the United States. During Monday’s session at Wall Street, traders dissected comments from various Federal Reserve speakers ahead of Wednesday’s consumer price index data release which could influence rate hike decisions.
Federal Reserve representatives Michael Barr, Mary Daly, and Loretta Mester opined that further rate hikes would be necessary this year if inflation is to return back within bounds towards its targeted goal of 2%.
The pace has slackened somewhat since equities recorded a robust rally during H1 as renewed concerns emerged regarding how multiple economic currents might affect corporate earnings. Morgan Stanley 's (NYSE:MS) Michael Wilson recently cautioned that profit expectations will take center stage given lofty equity valuations coupled with higher interest rates and limited liquidity availability.
Tech giants like Tesla Inc (NASDAQ:TSLA) suffered nearly a 2% dip while Amazon.com Inc (NASDAQ:AMZN) experienced losses before launching its Prime Day event. The Nasdaq-100 is expected to undergo an exceptional rebalancing following an historic first half driven by artificial intelligence enthusiasm while major banks trimmed profits due to anticipated plans for capital requirement enhancement.
“Several risks remain imminent,” warns Seema Shah, Principal Asset Management Chief Global Strategist “With general equity valuations once again reaching stretched levels amid narrow market breadth – any deviation from perfection in earnings could leave the market exposed”
Earnings season commences fully swing come Friday when JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C), Wells Fargo & Company (NYSE:WFC) reveal their earnings figures.