Market Talk - Tuesday, Sept. 28

ASIA:

China remained on course to be more than 30% short of its 2021 commitments under the phase one trade deal with the United States with four months left, according to the latest analysis of trade data between the world’s two largest economies. The phase one trade deal outlined in the agreement mention that China has to buy an additional US$200 billion worth of goods and services over 2020-21, relative to 2017 levels. But according to a report released by the Peterson Institute for International Economics (PIIE) on Monday, China’s purchases of US goods from January to August reached only 69% of the year-to-date target based on Chinese import data, and only 62% of the target based on US export data – the same figures seen in May. According to the report, agriculture purchases under the phase one trade deal reached 92% of the 2021 commitment up until the end of August based on Chinese import data, and 89% of the target based on US export data.

India’s government said on Monday it would stick to its borrowing plan for the current fiscal year despite an uptick in tax collection, suggesting New Delhi will continue to spend to revive Asia’s third largest economy. It said it planned gross borrowing of 5.03 trillion Indian rupees ($68.15 billion) via bonds from October-March. It has already borrowed 7.02 trillion rupees from its overall target of 12.055 trillion rupees for 2021/22. Finance minister Nirmala Sitharaman and her officials have repeatedly promised in recent months to keep up spending to revive the economy. The borrowing estimates reflect her plan to lower the annual fiscal deficit to 6.8% of GDP from 9.3% last year, without cutting planned expenditure of 34.8 trillion rupees. Federal borrowing will be conducted in 21 weekly tranches of 230-240 billion rupees, the government said. More than 28% of the bonds will be issued with a 10-year maturity and the government will also issue new floating rate bonds with 7-8 years maturity on top of the existing 13-year ones, it added.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 56.10 or -0.19% to 30,183.96
  • Shanghai increased 19.39 points or 0.54% to 3,602.22
  • Hang Seng increased 291.61 or 1.20% to 24,500.39
  • ASX 200 decreased 108.60 points or -1.47% to 7,275.60
  • Kospi decreased 35.72 points or -1.14% to 3,097.92
  • SENSEX decreased 410.28 points or -0.68% to 59,667.60
  • Nifty50 decreased 106.50 points or -0.60% to 17,748.60

The major Asian currency markets had a mixed day today:

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