Asian stocks follow gains on Wall Street
Taking positive cues from encouraging gains on Wall Street, Asian stocks with an exception to China moved up on Tuesday. Chinese stock market dropped following the jitters emerging from adverse developments in forms of corruption and illegal trading that dampened the market sentiment.
The surge in Asian stocks enhanced investor confidence about the future outlook. The Chinese government is also investigating to find out the reasons why were the markets crashed during the period of June-August.
Tracking to overnight rally, Asian stocks also surged pushing Hang Seng index up 1.1 percent. Japan markets were closed on account of Culture Day holiday. Shanghai Composite index was down 0.2 percent following the adverse news hitting the market sentiment. Taiwan's Taiex rose 1.1 percent indicating one-week high level as technology stocks gained on Nasdaq. Meanwhile, Australia, South Korea, and Malaysian indices also rose.
The illegal futures trading and investigation into anti-corruption pertaining to Dongfeng Motor Group have impacted the markets in a negative way. Xu Xiant, the manager of Zexi Investment was arrested by Police on Sunday on charges of illegal insider trading in futures, according to state-owned Xinhua news agency. This sent jitters to the Chinese stock markets.
In another development, Zhang Yun, President, Agricultural Bank of China, was taken into custody in connection with the same investigation. The Chinese government has intensified probe into financial scamsand other market manipulation that led to the sudden crash in equity markets in June and July.
The technology stocks rallied on Nasdaq showing 75-day high. In Europe, Volkswagen's emission results rigging scam and a $5.1-bn cash call from Standard Chartered pushed European stocks lower. Europe's FTSEurofirst moved down as nine percent drop in Standard Chartered and three percent fall in Volkswagen put more pressure.
Investors are still wary of next development and looking to cues from the US Federal Reserve and European Central Bank. The current situation is showing under current risk appetite in the market. Volatility is low and quarterly numbers from technology companies are ok, said analysts.
Turkey's lira and stocks eased after post-election gains recorded on Monday. Samsung Electronics shares fell 2.2 percent.
China's unexpected devaluation of Yuan on 11 August had sparked off losses across the global financial markets in August. This has resulted as the worst quarter since 2011. Now, the markets are looking to the central banks in Japan and Europe. Payroll data is scheduled for this week.
China President Xi Jinping's assurance that China's economy would grow not less than 6.5 percent for next five years has changed the mood of investors into positive mode. However, Chinese financial markets need major triggers to gain a major momentum in stock prices.