Asian stock markets made significant gains on Monday, led by a surge in Chinese shares, which rose by more than 2%. This positive momentum follows comments from China’s Finance Minister, Lan Foan, who indicated that further stimulus measures are necessary to support the country’s slowing economy.
Despite U.S. futures remaining largely stable and a decline in oil prices, the announcement sparked optimism among investors. Lan stated on Saturday that the government is exploring additional avenues to stimulate economic growth, although he did not elaborate on a specific new stimulus package. Market expectations are leaning towards a potential stimulus plan worth up to 2 trillion yuan, or approximately $280 billion.
Market analysts suggest that any supportive statements from government officials typically result in rising share prices. Additionally, state-run companies and financial institutions, referred to as the “national team,” often intervene by purchasing stocks to stabilize the market. Stephen Innes from SPI Asset Management remarked on the vagueness of official communications, stating, “The devil, as they say, is always in the details — or in this case, the glaring lack of them.” He further emphasized that clarity on the government’s plans may emerge by mid-week, determining whether the current market enthusiasm is warranted.
In terms of market performance, the Shanghai Composite Index climbed 2.1% to reach 3,284.32, while the Shenzhen market experienced a 3% increase. Conversely, Hong Kong’s Hang Seng Index dipped by 0.9% to settle at 21,061.23.
The Chinese economy also revealed weaker consumer inflation figures for September, alongside further declines in wholesale prices, reflecting ongoing domestic demand challenges. These trends have prompted the government to implement a series of measures aimed at reviving sluggish housing sales and stimulating overall consumer spending.
Notably, large-scale military exercises by China in the Taiwan Strait did not seem to affect market performance significantly, with Taiwan’s Taiex index gaining 0.3%. Meanwhile, Tokyo’s markets were closed due to a public holiday. South Korea’s Kospi Index rose by 1% to 2,623.29, while Australia’s S&P/ASX 200 index gained 0.5% to reach 8,252.80.
The positive performance in Asia followed a robust closing on Wall Street on Friday, where U.S. stocks reached record highs, buoyed by strong earnings reports from major banks. The S&P 500 increased by 0.6% to 5,815.03, surpassing its previous record and marking its fifth consecutive week of gains. The Dow Jones Industrial Average climbed 1% to a new record of 42,863.86, while the Nasdaq composite lagged with a 0.3% increase due to a decline in Tesla shares, which fell by 8.8% following the unveiling of its anticipated robotaxi.
Wells Fargo reported a stronger-than-expected quarterly profit, resulting in a 5.6% increase in its stock price. JPMorgan Chase’s shares also rose by 4.4% after reporting a smaller-than-anticipated decline in profits. BlackRock saw a 3.6% increase after exceeding profit expectations, ending September with a record $11.5 trillion in managed assets.
The notable rise in bank stocks offset Tesla’s decline, while potential rival Uber Technologies experienced a significant jump of 10.8% following the announcement of Tesla’s “Cybercab.” Lyft shares also rose by 9.6%.
In the bond market, U.S. Treasury yields showed mixed movements after recent inflation updates and consumer sentiment reports. The producer price index revealed a 1.8% increase in September compared to the previous year, a slight improvement but not meeting economists’ expectations.
In commodity markets, U.S. benchmark crude oil dropped $1.23 to $74.33 per barrel during electronic trading on the New York Mercantile Exchange. Brent crude, the international benchmark, fell by $1.26 to $77.78 per barrel.
The U.S. dollar strengthened, rising to 149.30 Japanese yen from 149.08, while the euro declined to $1.0928 from $1.0935.
Related topic:
