Stocks slide

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TOKYO- Most Asian stocks slid on Tuesday, led by sharp declines in Hong Kong as the start of China’s week-long annual session of parliament disappointed investors with its lack of big ticket stimulus plans to prop up the struggling economy.

Equity markets in the region were already on the back foot following a retreat from record highs on Wall Street on Monday, amid signs the US Federal Reserve is in no hurry to cut interest rates. US stock futures also pointed lower, as did European futures

Bitcoin continued its ascent to a fresh two-year peak of $68,828 that put it within spitting distance of an all-time high. Gold marked a record closing high of $2,114.99 on Monday and continued to hover around that level.

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The Chinese government retained last year’s target for economic growth of “around 5 percent “ for this year, and announced plans to run a budget deficit of 3 percent  of economic output, down from a revised 3.8 percent  last year.

It also unveiled plans to issue 1 trillion yuan ($139 billion) in special ultra-long term treasury bonds, which are not included in the budget.

Mainland stocks reversed early losses with the blue-chip CSI 300 up about 0.45 percent  by 0600 GMT, amid signs of suspected state-backed buying of some exchange-traded funds.

However, that failed to lift other markets in the region with Hong Kong’s Hang Seng deepening earlier declines to 2.67 percent . MSCI’s broadest index of Asia-Pacific shares outside Japan lost 1 percent .

The early announcements from China’s NPC suggest “large fiscal stimulus is off the table for now,” said James Kniveton, senior corporate FX dealer at Convera.

“Stability is still the overriding factor in Chinese policy making, and the announcements so far seem to conform to that philosophy.”

Japan’s Nikkei erased early losses in the afternoon session, but ended the day slightly down to miss out on a new record high close.

Meanwhile, alternative assets such as cryptocurrencies and bullion have been supported and equities sold following hawkish comments from Atlanta Fed President Raphael Bostic that there was no urgency to cut interest rates amid risks inflation stays above the central bank’s 2 percent  target.

Those remarks frayed nerves ahead of Fed Chair Jerome Powell’s semi-annual testimony to Congress later in the week, as well as a deluge of key data on prices and jobs, culminating with Friday’s non-farm payrolls report.

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