Asia stocks furtively rose on Tuesday. The rise of the stocks was present during afternoon trade.
Japanese Nikkei 225 gained 0.59% to 21,885.24, with shares of index heavyweight. Softbank Group rose by 1.77%. Also, the Topix index acquired 0.96% to 1,603.00.
Meanwhile, in South Korea, Kospi rose 0.45% higher to close at 2,072.42. This is possible for South Korea’s biopharmaceutical company Celltrion’s shares drastically escalated 5.79%.
However, the rise of the aforesaid Asia stocks, specifically this year, was not due to earnings growth. Identical to US markets, valuation expansion is the factor inducing the rise of the stocks in most cases.
Earnings decline has become a grave nemesis for Asian markets since the beginning of the year. Besides the continuously soaring US-China trade war, Japan-South Korea dispute also enormously affect the market.
Bloomberg has compiled data pertinent to the matter. Accordingly, companies in Japan and South Korea are the major contributors to the earnings decline.
Also Read: China Stocks Heading South
Asia Stock Buyers’ Persistence amid Poor Profit Outlook
The poor profit displayed in the previous section does not hinder Asia stock buyers so far. Despite the rapid fluctuation, they are still confident and possess a strong faith in the markets.
Furthermore, there prevails possibilities that the markets will fluctuate more in the near future. One of the causing factors is the upcoming continuation of trade war negotiations in Washington DC next week, as many might expect.
The outcomes of the negotiations will surely affect the markets heavily. Whether the talks will be fruitful or not, major changes will surely happen although if, by any chance, the negotiations did not work properly, the markets might sink again.
Furthermore, another major event that might influence the markets is the not-too-future dispute settlement between Japan and South Korea. Since both countries are also having a trade dispute, the outcomes will determine the fate of the markets, especially the ones in the two countries.
Moreover, the Japan’s, delayed, sales tax increase might be influential as well. The tax increase, which is already in effect starting from today, has previously worried retailers, restaurants and other businesses in the country.
Also Read: Oxford Economics: Southeast Asia GDP Going Slow This Year
