Stocks in Asia fell on Tuesday as investors worried China's latest rate cut was not enough to boost confidence in the weakening economy and awaited a wider stimulus package by Beijing.
for the first time in 10 months on Tuesday, with its one-year loan prime rate lowered by 10 basis points to 3.55% and the five-year LPR cut by the same margin to 4.20%.fell 0.69%. China's benchmark CSI edged down 0.03%. U.S. markets were closed on Monday.
"I don't think they are going to move the needle at all," said Redmond Wong, Greater China market strategist at Saxo Markets. He said a 15 basis-point cut would be a "stronger message" to boost China's property sector.The rate cuts are the latest in a string of moves by Beijing to shore up a slowing recovery in the world's second-largest economy amid looming deflation risks, property market woes and high youth unemployment.
The People’s Bank of China lowered the medium-term lending facility rate on Thursday last week. The market was speculating on what China could do next to revive the recovery but was disappointed by a lack of concrete measures from a"We probably will need to wait for China's Politburo meeting, headed by President Xi early in July, for any concrete announcement on a new round of stimulus," National Australia Bank Senior FX Strategist Rodrigo Catril said in a client note.
The delay in further stimulus measures weighed on sentiment and followed moves by a handful of big banks, including Goldman Sachs, to lower their growth forecasts for the Chinese economy. Meanwhile, China and the United States failed to produce any major breakthrough during a rare visit to Beijing by U.S. Secretary of State Antony Blinken, but both sides agreed"The meeting helped improve sentiment, but the market also understands that there's strategic competition between the U.S. and China," Saxo's Wong said.
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