SINGAPORE- Asian stocks swung between gain and loss on Monday as investors struggled to reach a consensus view on China’s broad economic stimulus promises made over the weekend which were light on specifics.
Minister of Finance Lan Foan at a closely watched news conference on Saturday pledged to “significantly increase” debt, but left investors guessing on the overall size of the stimulus, a detail needed to gauge the longevity of a stock market rally.
“Most onshore investors believe Beijing’s decision to restructure local government and housing debt using central government funds is more significant than many foreign investors believe,” said analysts at Morgan Stanley in a client note.
The divergence was apparent on Monday, after shares in Hong Kong opened lower and were choppy in early trade, contrasting sharply with their mainland Chinese peers which got off to a strong start.
The Hang Seng Index last traded 0.41 percent lower, while the CSI300 blue-chip index rose 1.52 percent. The Shanghai Composite Index gained 1.66 percent.
Property stocks onshore and offshore, however, eked out solid gain as investors bet the latest stimulus measures could aid China’s beleaguered property sector.
The Hang Seng Mainland Properties Index advanced 1.37 percent, while the CSI300 Real Estate Index jumped 4.1 percent.
The mixed picture left MSCI’s broadest index of Asia-Pacific shares outside Japan up a marginal 0.12 percent, with trading in Asia thinned on Monday given a holiday in Japan.
US stock futures similarly edged lower, with S&P 500 futures losing 0.06 percent while Nasdaq futures fell 0.18 percent.
EUROSTOXX 50 futures and FTSE futures eased 0.06 percent and 0.13 percent, respectively.
Also in a blow to China’s growth outlook, consumer inflation unexpectedly eased in September while producer price deflation deepened, data on Sunday showed.
Reflecting the lingering concerns over the Chinese economy, the onshore yuan slipped 0.12 percent to 7.0750 per US dollar, while its offshore counterpart fell 0.18 percent to 7.0830 per dollar.
Oil prices also slid on Monday owing to worries about waning Chinese demand for the commodity.