Asian stock markets declined on Tuesday as China announced a reduced economic growth target amid escalating trade disputes with the United States and concerns over rising debt levels.
The Australian S&P/ASX 200 fell 0.6%, while South Korea’s Kospi dropped 0.5%. Japan’s Nikkei 225 slid 0.3%, and MSCI’s Asia-Pacific index outside Japan declined 0.2%.
Chinese Premier Li Keqiang set the 2019 growth target at 6.0-6.5%, maintaining the previous year’s range. The government also announced a 2.8% GDP budget deficit and increased local government bond quotas by 0.8 trillion yuan to 2.15 trillion yuan.
Analysts warned that the expanded bond program could signal short-term infrastructure-driven growth rather than debt reduction. Naoto Saito of Daiwa Institute of Research noted, "The significant rise in local government special bonds suggests reliance on investment over de-leveraging, which may create long-term risks."
U.S. markets also showed weakness, with the Dow Jones Industrial Average falling 0.79% and the S&P 500 dropping 0.39% on Monday. A surprise decline in U.S. construction spending contributed to the downturn, though some saw it as a correction after a year-long rally.
The MSCI World index, which has gained 16.6% since December 2018, now trades at 14.6 times earnings—its highest level since early October. Speculation about a potential U.S.-China trade deal in March prompted profit-taking rather than continued buying.
Currency markets saw the dollar strengthen against the euro and yen. The euro fell 0.25% to $1.1339, while the yen dropped to 111.75. Gold and silver prices declined, with gold hitting a 12-day low of $1,283.10 per ounce.
Oil prices remained stable as Russia pledged to increase supply cuts. U.S. crude futures traded at $56.41 per barrel, down 0.3% in early Asia.
