Asia’s major stock markets were back on the front foot on Thursday as the promise of more stimulus measures from Beijing lifted the mood in what has been a rollercoaster ride for the region’s markets this week.
Chinese stocks resumed their rally, fanned by expectations a briefing from finance officials this weekend would deliver more fiscal support, while the dollar lingered near a two-month high before a US inflation report.
Mainland shares also got a lift early in the Asia session as China’s central bank kicked off its 500 billion yuan facility to spur capital markets, a plan it announced late September as part of a series of stimulus measures.
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China’s blue-chip CSI300 index rose 1.06%, partially reversing the previous day’s 7% drop, which was triggered by investor concern about the lack of details in Beijing’s stimulus package.
The Shanghai Composite Index rose 1.32%, or 43.07 points, to 3,301.93, while the Shenzhen Composite Index on China’s second exchange dipped 0.37%, or 7.04 points, to 1,910.27.
Hong Kong’s Hang Seng jumped 2.98%, or 614.74 points, to 21,251.98, after slipping 1.3% on Wednesday and is up 26% this year.
Mainland shares rallied to two-year highs on Tuesday after the long National Day holiday but quickly lost steam as the lack of details on stimulus measures dealt a blow to market enthusiasm.
Benchmark indexes in China notched their biggest daily losses on Wednesday since the Covid-19 pandemic began.
Japan’s Nikkei share average ended higher, tracking a strong finish on Wall Street overnight, although it pared gains as investors took profits ahead of the September US inflation data.
The Nikkei share average edged up 0.26%, or 102.93 points, to close at 39,380.89, after climbing as much as 0.86% earlier in the session, while the broader Topix was ahead 0.20%, or 5.43 points, to 2,712.67.
Technology investor SoftBank Group rose 3.97% to give the biggest boost to the Nikkei. Uniqlo brand owner Fast Retailing gained 1.28%.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Mumbai and Bangkok advanced, while Singapore, Manila, Wellington and Jakarta edged down. MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.25% higher.
Us Dollar Index Climbs
Overnight, the S&P 500 and the Dow closed at record highs after the release of Federal Reserve meeting minutes and ahead of September inflation data.
The minutes showed a “substantial majority” of Fed officials at the September meeting supported beginning an era of easier monetary policy with an outsized half-point rate cut.
However, there appeared even broader agreement that the initial move would not commit the Fed to any particular pace of rate reductions in the future, the minutes showed.
Markets are pricing in an 82% chance of a 25 basis point cut next month, the CME FedWatch tool showed, with investors scaling back expectations for aggressive rate cuts after last week’s strong U.S. jobs report.
Investor focus will be on inflation data on Thursday in the form of the consumer price index (CPI) for insight into the Fed’s rate path, while the corporate earnings season kicks off with bank earnings on Friday.
September’s CPI is likely to show core inflation holding steady at a 3.2% year-on-year clip, according to economists polled by Reuters.
The shifting US interest rate expectations have boosted the dollar, with the dollar index, which measures the currency against six key rivals, steady after climbing to the highest since August 16 overnight.
In commodities, oil prices rose as investors contended with rising tensions in the Middle East and its impact on oil supply, as well as a spike in demand as a major storm barrelled into Florida.
Brent crude futures was 0.78% higher at $77.18 a barrel, while the U.S. West Texas Intermediate (WTI) futures rose 0.83% at $73.85 a barrel.
Key figures
Tokyo – Nikkei 225 > UP 0.26% at 39,380.89 (close)
Hong Kong – Hang Seng Index > UP 2.98% at 21,251.98 (close)
Shanghai – Composite > UP 1.32% at 3,301.93 (close)
London – FTSE 100 < DOWN 0.05% at 8,239.83 (0934 BST)
New York – Dow > UP 1.03% at 42,512.00 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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