If you believe financial press fake news reports, news of lower than expected fixed asset formation in China overnight dampened Asian stock markets. In fact, the MSCI non-Japan Index continued to rise modestly AFTER the Chinese data were released.

Rail stocks lead Hong Kong market: China Railway Construction, rolling-stock manufacturer CRRC, and China Railway Group were among the top gainers in the Hang Seng China Enterprises Index (HSCEI) overnight.  Japan’s equity market lost ground after the morning announcement–but not Indonesia, Philippines, Malaysia, Thailand or Vietnam.

There’s a simple explanation: the less China spends on infrastructure at home, the more it will spend on infrastructure under the One Belt, One Road rubric, benefiting its poorer neighbors. That’s why Chinese railway companies are up despite lower infrastructure spending in China, and why peripheral Asian markets are outperforming.