Asian stocks fell Monday on a decline in China's GDP and in its housing price growth.The GDP fell from 2.9% in Q4 to 2.5% in Q1.Housing prices rose in only 44 of 70 cities.There were no cities in China where real estate outperformed the money market.Gary Evans,head of equity strategy at HSBC,said that's pretty negative for Chinese growth.Real estate is the single biggest driver of domestic demand.*
Thailand's GDP declined on political unrest,dropping 2.1% on the quarter and 0.6% on the year.These factors,plus a fall in iron ore prices hurting Australian miners,sent the MSCI Asia Pacific index down 0.26%.*
I think the Thai problem is gonna rumble on for a long time,Mr.Evans continued.The appetite of many investors is for restructuring-as in Mexico.China is getting a little nervous about how fast home prices are coming down.We like Indonesia and China's state-owned enterprises.The thing is,whether a market is moving in the right direction.It doesn't take much to move Indonesia in the right direction.*
I'm underweight on Japan.Everyone is sitting on a loss-making position,thinking it will get better,but it isn't going to happen.In every country there are vested interests resisting change,and Japan is such a place.*
India's Nifty Fifty Index rose 0.88% on Monday becuase of euphoria over their new prime minister,Narendra Modi,who was first minister of Gujarat state.India is the most over-owned market globally,Mr.Evans pointed out.There will be a shift to Indian energy,utilities and infrastructure stocks.I think the selloff starts maybe today.Then people will buy back in because India is still a good story.The rupee is probably getting close to an equilibrium.
How Mr.Modi will react to Pakistan is uncertain so far.He gets things done:that's what people have bought into,because we don't know what his policy is gonna be.To me,India is like the EU with its many states.Running the central government is different from running just one state as Mr.Modi did.I think inflation is gonna be the key issue,HSBC's Gary Evans noted.*
In sport,Great Britain scored a cycling double victory in the Amgen Tour of California Sunday.The Tour's Stage 8 ended in Thousand Oaks and was won by the current British Champion,and former World Champion,Mark Cavendish from the Isle of Man.To be fair really,I'm in the form of my life,Cavendish said.I just had some French toast for breakfast-I wasn't expecting a tour.Im super happy about that.*
Britain's Bradley Wiggins won the overall yellow jersey for the Amgen Tour,and had previously won both the Tour de France and London Olympics gold medal in 2012.It's right up there as a satisfaction,Sir Bradley said.It's nice to still be winning at this age,34.
His wife and two children were on hand in Thousand Oaks to help him celebrate.*
Amgen(AMGN),HSBC Holdings(HBC)
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