Asian stocks enjoyed a widespread rally on Thursday with investor optimism high after China signalled it was ready to roll out even more stimulus measures to steady its wobbly economy.
The sea of green across equities in Asia came even as Wall Street closed lower overnight, with global stock indexes giving up their gains from earlier in the week.
Japan’s Nikkei share average jumped as chip giants Tokyo Electron and Advantest tracked their US peers higher and a weaker yen boosted exporters.
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The Nikkei was up 2.79% at 38,925.63, its biggest daily percentage gain since September 12. The benchmark has risen for five out of six sessions. The broader Topix gained 2.66% to 2,721.12.
Shares of Micron Technology surged roughly 14% in after-hours trade on Wednesday after the company forecast higher-than-expected first-quarter revenue due to demand for its memory chips used in artificial intelligence computing.
The yen fell to a three-week low of 145.04 per dollar earlier in the session. A weaker yen is seen as a boon for Japanese exporters as it lifts profits when earnings from abroad are brought home.
Chip-making equipment maker Tokyo Electron surged 8% and was the biggest boost to the Nikkei. Chip-testing equipment maker Advantest rose 5.39% and technology investor SoftBank Group climbed 4.1%.
Meanwhile, minutes from the Bank of Japan’s (BOJ) July policy meeting were not hawkish, boosting investor sentiment.
The minutes showed that BOJ policymakers were divided on how quickly the central bank should raise interest rates further, highlighting uncertainty on the timing of the next increase in borrowing costs.
Mainland China stocks extended gains and were set for a seventh straight winning session, as investors cheered a report that further stimulus could be rolled out to arrest a slowdown in the world’s second-largest economy.
Beijing was considering injecting up to 1 trillion yuan ($142.48 billion) of capital into its biggest state banks to increase their capacity to support the struggling economy, after it unveiled earlier this week its biggest stimulus since the pandemic, according to a report citing unnamed sources.
Fed Reserve Chiefs to Speak
The blue-chip CSI300 index climbed 4.23%, while the Shanghai Composite Index rose 3.61%, or 104.65 points, to 3,000.95. The Shenzhen Composite Index on China’s second exchange gained 4.00%, or 63.09 points, to 1,638.36.
The biggest winners early in the session were consumer staples and real estate shares, with gains of 3.42% and 3.19%, respectively.
Chinese H-shares listed in Hong Kong – stocks belonging to companies from the Chinese mainland – rose 2.77% to 6,952.79 points, while the Hang Seng Index surged 4.16%, or 795.48 points, to 19,924.58.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Mumbai were also well up. MSCI’s broadest index of Asia-Pacific shares outside Japan rose more than 1% to an over two-year high.
In the broader market, investors turned their attention to a raft of speeches from Federal Reserve policymakers later in the day, including remarks from Chair Jerome Powell, which could provide further clues on the US rate outlook.
The release of the core personal consumption expenditures (PCE) price index – the Fed’s preferred measure of inflation – is also due on Friday.
Markets are now pricing in a roughly 62% chance of a 50bp cut at the Fed’s November policy meeting and see a total of 77bps worth of cuts by the year end.
Oil Edges Up
Shifting expectations of how aggressive the Fed would ease rates this year and next have in turn kept the dollar largely rangebound over the past month.
It was back on the front foot on Thursday, having fallen earlier in the week as China’s slew of support measures boosted risk appetite and sent traders scooping up China-linked assets such as the Australian and New Zealand dollars.
Analysts said the greenback also drew additional support from month-end flows.
Against the dollar, the euro and sterling retreated from their recent peaks to last trade at $1.1137 and $1.3324, respectively.
The offshore yuan ticked up 0.06% to 7.0277 per dollar, having briefly strengthened past the key psychological level of 7 per dollar in the previous session.
In commodities, oil prices edged up with Brent crude futures last 0.27% higher at $73.66 a barrel. US crude rose 0.2% to $69.82 per barrel.
Spot gold was steady at $2,659.56 an ounce, having scaled a record high on Wednesday.
Key figures
Tokyo – Nikkei 225 > UP 2.79% at 38,925.63 (close)
Hong Kong – Hang Seng Index > UP 4.16% at 19,924.58 (close)
Shanghai – Composite > UP 3.61% at 3,000.95 (close)
London – FTSE 100 > UP 0.47% at 8,307.92 (0933 BST)
New York – Dow < DOWN 0.70% at 41,914.75 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Taiwan’s Export Boom Continues, Fuelled by Global AI Demand
Hang Seng Adds to Stimulus Surge, Nikkei Dips on Profit-Taking
China Central Bank Stimulus Moves ‘Broad But Underwhelming’
Hang Seng, China Stocks Leap on Policy Boosts; Nikkei Rallies
