MT Insider: Asia Economics - China FDI Beat Clouded by Bank Weakness, Jackson Hole - Kuroda on Overcoming Deflation


The China July Foreign Direct Investment ( FDI ) figures came in significantly above expectations, up 24.1% versus the street at 14%. However, the Shanghai Comp closed down by 0.47%.

There was significant weakness in banks on continued reports of deposit liberalization, which is expected to pressure net interest margins. Looking ahead, banks in the region will be reporting earnings, and current forecasts are fairly sluggish.

In contrast, the Taiwan Stock Weighed Index (TSWE) was up 0.75% on reports of Foxconn, which is major partner and manufacturer for Apple ( AAPL ), is resuming large-scale hiring plans. Specifically, the company reported that it has already begun hiring workers in Shenzhen and Zhengzhou to meet Q4 client demand.

Japan's Nikkei was the best performing market, closing up 2.2% ahead of Bank of Japan Chief Kuroda's speech at Jackson Hole (notably, Ben Bernanke and Mario Draghi will be absent from the economic conference this year). Investors expect Kuroda to reiterate his commitment to putting an end to deflation.

That said, TEPCO extended its decline owing to continued worries about its Fukushima plant. The outlook for the nuclear market in Japan remains uncertain (which Kuroda had previously stated would be a stimulus to the economy.)

SSEC 2057.46 -9.67 -0.47

TWSE 7873.31 +58.93 +0.75

N225 13660.55 +295.38 +2.21

DJIA 14937.0 -2.0 -0.01

IXIC 3105.0 +3.25 +0.10

SPX 1655.25 +0.5 +0.03

AAPL 504.01 +1.04 +0.21

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: AAPL , FDI

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