Asian equities made a mixed start to the week. Nikkei (-0.69%) and Topix (-0.89%) sold off as the Japanese GDP shrank 1.6% in the fourth quarter
versus -1% expected by analysts and +0.4% printed a quarter earlier. This was the first economic contraction since the third quarter of
2018, the sharpest shrinkage since the second quarter of 2014 and didn’t even take into account the impact of the coronavirus.
Stocks in Shanghai (+2.28%) and Hong Kong (+0.52%) kicked off the week on a positive note, however, as Chinese and Hong Kong governments promised extra fiscal stimulus to fight back the economic slowdown caused by the coronavirus breakout.
IMF’s managing director Georgieva said that ‘the monetary space is shrinking and the reliance on fiscal measures as well as structural reforms to boost growth ought to be stronger’
By Ipek Ozkardeskaya