Asian Markets Surge as China Promises Stimulus

Posted Wednesday, June 12, 2019 by
Arslan Butt • 1 min read

As you know, global stock markets were trading lower since the trade war issue began. Shanghai composite (SSCE) has dropped from the high of 3,260 to 2,909.97 in just one month as investors fear the trade war and its consequences on the Chinese markets.

However, the mainland Chinese shares surged after Beijing indicated fresh fiscal stimulus for its slowing economy, declaring it would permit local governments to accept proceeds from individual bonds as capital for significant investment projects.

It’s a second positive fundamental for the stock markets after the US opted not to move ahead with tariff hikes on Mexico this week. However, the trade war with China continues to boil. Adding fuel to the fire, the Chinese Foreign Ministry announced that Beijing would “resolutely respond and fight to the end” if the US escalated the trade war issue.

What’s Next?

Well, the Risk off Sentiment still prevails as President Donald Trump said the US would inflict further tariffs if no agreement is reached at the G20 summit on June 28-29. So, we need to be careful with stocks and gold as their movement is a bit uncertain.

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