Asian stocks little changed after China signals more stimulus

Pedestrians walk past a share prices board showing the early numbers on the Tokyo Stock Exchange in Tokyo on Dec 17, 2015.
Pedestrians walk past a share prices board showing the early numbers on the Tokyo Stock Exchange in Tokyo on Dec 17, 2015.PHOTO: AFP

SYDNEY (BLOOMBERG) - Asian stocks were little changed in thin trading on Tuesday (Dec 22) as investors weighed the prospect of more stimulus from Chinese leaders.

The MSCI Asia Pacific Index added less than 0.1 per cent to 130.05 as of 9:12 am in Tokyo. Australia's S&P/ASX 200 Index climbed 0.5 per cent with volumes about 40 per cent below the 30- day intraday average. The Standard & Poor's 500 Index rebounded on Monday from its biggest two-day loss in three months.

China's government said monetary policy must be more "flexible" and fiscal policy more "forceful" to combat slowing growth in the world's second-largest economy. The rout in crude prices this year has pushed oil to the lowest levels since before the financial crisis, threatening to keep inflation from meeting central bank targets in Europe and America.

"Equity valuations are still compelling," said George Boubouras, Melbourne-based chief investment officer at Contango Asset Management. "We expect lighter volumes going into Christmas this week. Relative valuations are still there," favoring equities, he said.

Asian shares are down 5.6 per cent this year, on course for their first back-to-back annual declines since 2002, as a commodity rout deepened and Chinese growth waned. The loss is about three times that of the S&P 500, which has dropped 1.8 per cent in 2015. The Asian gauge trades at 13.7 times estimated earnings, compared with 17.1 for the S&P 500 and 15.5 for the Stoxx Europe 600 Index.

Japan's Topix index gained 0.3 per cent as the yen traded little changed against the US dollar for a second day. The nation's markets are closed on Wednesday for a holiday.

South Korea's Kospi index lost 0.1 per cent. New Zealand's S&P/NZX 50 Index gained 0.5 per cent. Futures on Hong Kong's Hang Seng Index advanced 0.4 per cent in most recent trading, while contracts on the Hang Seng China Enterprises Index of mainland shares traded in the city climbed 0.3 per cent.

Futures on the S&P 500 rose 0.2 per cent. US stocks surged in the final minutes of trading on Monday, rebounding after the biggest two-day rout in three months as financial and technology companies led gains from equities' lowest levels since October.