Asian shares have begun the week on a positive note, with stocks in China rising by over 1% after the finance minister indicated over the weekend that additional stimulus is necessary for the country’s slowing economy. U.S. futures remained relatively stable, and oil prices saw a slight retreat. China’s finance minister mentioned on Saturday that the government was exploring further strategies to boost the economy, although specific details on a major new stimulus plan were not provided. Market observers and analysts have been anticipating a plan worth up to 2 trillion yuan, approximately $280 billion. Any signs of support typically lead to an uptick in prices, with significant state-run companies and financial institutions stepping in to purchase stocks and help stabilise the markets, as per analysts.
Stephen Innes of SPI Asset Management commented, “The devil, as they say, is always in the details—or in this case, the glaring lack of them. When it comes to Chinese policy briefings, it’s usually all sizzle and no steak. By mid-week, we’ll see if the market bid has legs, and by month’s end, we’ll know for sure if Beijing is delivering the goods or if it’s just more smoke and mirrors.” The Shanghai Composite index saw a rise of 1.7% to 3,271.06, while the smaller market in Shenzhen also gained by 1.9%. However, Hong Kong’s Hang Seng index experienced a decrease of 0.4% to 21,164.93. Consumer inflation in China weakened in September, and wholesale prices continued to decline, reflecting the ongoing weakness in domestic demand. The Chinese government has been implementing various measures to stimulate falling housing sales and other expenditures.
Despite large-scale military exercises by China around Taiwan and its surrounding islands not significantly impacting markets, Taiwan’s Taiex saw a 0.4% increase. Tokyo’s markets were closed for a public holiday. In South Korea, the Kospi rose by 1% to 2,622.43, and Australia’s S&P/ASX 200 also registered a 0.5% gain to reach 8,253.60. The positive momentum in Asia followed a strong finish on Wall Street on Friday, with U.S. stocks reaching new records driven by robust profits at major banks. The S&P 500 climbed by 0.6% to 5,815.03, surpassing its previous all-time high and securing its fifth consecutive winning week. The Dow Jones Industrial Average also surged by 1% to set a new record of 42,863.86.
In the bond market, Treasury yields displayed mixed movements following the latest updates on wholesale inflation and consumer sentiment in the U.S. Producer prices were 1.8% higher in September compared to the previous year, although not meeting economists’ expectations entirely. Meanwhile, in early Monday trading, U.S. benchmark crude oil dropped by 91 cents to $74.65 per barrel on the New York Mercantile Exchange, and Brent crude, the international standard, fell by 95 cents to $78.09 per barrel. The dollar strengthened against the Japanese yen to 149.30 from 149.08 late Friday, while the euro weakened to $1.0926 from $1.0935.