Asian Markets Face Mixed Fortunes Amid Chinese Economic Uncertainty

Asian stocks experienced modest gains on Tuesday but struggled to maintain momentum due to concerns over China's weak economy. Despite a rise in Chinese exports, fragile domestic demand and escalating trade tensions contributed to a slump in Chinese stocks. Investors are now eyeing U.S. inflation data for further insights.

Asian stocks edged slightly higher on Tuesday, although they found it challenging to sustain optimism from Wall Street amid concerns about China's faltering economy. Data revealed that China's exports witnessed their fastest growth since March 2023 in August. However, weak domestic demand resulted in imports missing forecasts, leading to widespread market apprehension.

This followed Monday's inflation figures that underscored weak domestic demand, exacerbating producer price deflation and fueling calls for more stimulus from Beijing. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.14%, close to a one-month low reached in the previous session. Gains were limited by a decline in Chinese stocks.

China's CSI300 blue-chip index fell to a seven-month low, trading 0.52% lower. The CSI Tourism Index also hit a record low, reflecting poor consumer demand. Compounding the economic challenges were rising U.S.-China trade tensions. The House of Representatives passed a bill restricting business with several Chinese biotech firms. This led to a significant dip in the shares of these companies, further affecting the market.

(With inputs from agencies.)