- Asian stock markets regain ground after plummeting for three trading days.
- Iran denies reports stating Tehran’s willingness to talk to end the war.
- China pledges loose monetary and fiscal policy to boost economic growth.
Asian stock markets recover significantly on Thursday after facing a bloodbath in the last three trading days. The strong recovery move in equity markets from the largest continent seems to be backed by the arrival of significant value bets after plunging due to the war in the Middle East.
As of writing, South Korea’s KOSPI is leading Asian equity markets with 12% gains, Nikkei 225 soars 2.45%, Shanghai surges almost 1%, and Nifty50 jumps 0.75%.
The recovery move in Asian stocks could be short-lived as Iran has clarified that it has not called for talks regarding the end of the war with the United States (US) and Israel, and is preparing for a prolonged war. “No message has been sent from Iran to the US, nor will any response be given to US messages,” an official from Tehran said, Tasnim reported.
On late Tuesday, a report from the New York Times (NYT) stated that Iran’s Ministry of Intelligence reached out indirectly to the US Central Intelligence Agency (CIA) with an offer to discuss terms for ending the conflict.
Asian stocks have bled significantly in the past few trading days as the Middle East conflict has resulted in a sharp increase in the oil price. Theoretically, higher oil prices prompt inflation and diminishes purchasing power of households.
Meanwhile, the pledge from Beijing to continue its loose fiscal policy has also strengthened Chinese equity markets. Earlier in the day, China’s Premier Li Qiang said in the annual report of this year’s meeting of the National People’s Congress (NPC) that Beijing will continue its moderately loose monetary policy and fiscal stimulus to promote economic growth. However, it has reduced the current year’s economic growth target to 4.5%-5% from 5% achieved last year.
