Asian Stocks Trade Higher Amid China-Taiwan Tensions

Asian Stocks Trade Higher Amid China-Taiwan Tensions

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Taiwanese stocks trade higher in Asia-Pacific markets as investors moved past geopolitical concerns surrounding US House Speaker Nancy Pelosi’s visit. Taiwan’s Taiex increased by 2.03%, while chipmaker TSMC increased by 3%. The index fell this week as tensions between the United States and China rose in response to Pelosi’s visit.

On the other hand, markets remain unconcerned with China’s military drills surrounding Taiwan, even though Japan’s Defense Minister Nobuo Kishi said Chinese missiles landed in Japan’s exclusive economic zone and branded the manoeuvres a “major problem.

The Nikkei 225 index in Japan increased 0.78 %, while the Topix index increased 0.75 %. The MSCI Asia Pacific Index (excluding Japan) rose 0.76 %. The S&P/ASX 200 index in Australia rose 0.43 %. The Reserve Bank of Australia reduced its inflation estimates and warned of a slowing economy.

In South Korea, the Kospi rose 0.87 %, while the Kosdaq rose 0.84 %. The Hang Seng index in Hong Kong was slightly higher. Alibaba’s Hong Kong shares fell approximately 2% as the company announced flat revenue growth, despite beating expectations in Q1.

Markets in Mainland China were trading up. The Shanghai Composite increased by 0.28 %, while the Shenzhen Component increased by 0.64 %. 

At the same time, the Reserve Bank of India (RBI) will announce its interest rate decision today. A Reuters survey of 63 respondents predicts a 50-basis-point increase to 5.4 %, while 20 forecasts a 35-basis-point gain.

“We believe optimum policy anchoring would necessitate at least another 50bp rise,” Mizuho Bank’s head of economics and strategy, Vishnu Varathan, said in a Friday note. He cited underlying inflation worries and a shaky Fed.

“All in all, it is in the RBI’s interest… to front-load a 50bp rise rather than save 15bp-25bp but lose macro-stability from May/June hikes,” he added.

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