Asian Stock Market Gains Momentum – Chinese Markets Thrive with Fresh Policies
Asian shares mostly went up on Thursday. Chinese stocks continued to rise after Beijing announced new policies to help the struggling markets.
Hong Kong saw a 1.8% increase, and Shanghai surged by 3%. Tokyo and Seoul also saw slight gains. U.S. futures and oil prices moved higher.
The Chinese central bank unveiled rules for lending to property developers and announced a cut in bank reserve requirements, injecting about 1 trillion yuan ($141 billion) into the economy.
China’s economy has slowed, with growth expected to be below 5% this year, the lowest since 1990, excluding the years of the COVID-19 pandemic. A real estate industry debt crisis has added to longer-term issues.
Shares in Chinese property developers, like China Evergrande Holdings and Country Garden, saw notable increases.
The Hang Seng in Hong Kong rose by 2.0% to 16,219.04, and the Shanghai Composite index went up by 2.9% to 2,902.85.
Tokyo’s Nikkei 225 showed little change, up about 10 points at 36,236.47.
There is speculation about the Bank of Japan ending its negative rate policy later this year, and investors are anticipating the impact on inflation and the currency.
South Korea’s Kospi edged up less than 1 point to 2,470.34 after the nation’s central bank reported better-than-expected quarterly growth of 0.6% in the last quarter of 2023.
Sydney’s S&P/ASX 200 advanced 0.5% to 7,555.40.
In the U.S., on Wednesday, the S&P 500 set a record for a fourth straight day, gaining 0.1% to 4,868.55. The Nasdaq composite rose 0.4% to 15,481.92, while the Dow Jones Industrial Average fell 0.3% to 37,806.39.
Recent stock market records are driven by hopes that cooling inflation will lead to multiple interest rate cuts by the Federal Reserve. This has already led to a considerable drop in Treasury yields.
A preliminary report on Wednesday indicated a seven-month high in business output growth. Prices charged by businesses also rose at the slowest rate since May 2020.
Later on Thursday, the U.S. government is expected to report a slowing annual growth rate of around 2% in October-December, down from the previous quarter’s vigorous 4.9%.
Despite the slowdown, the U.S. economy has shown surprising durability, marking a sixth straight quarter of expansion at an annual pace of 2% or more. Steady consumer spending, which drives more than two-thirds of the economy, has played a crucial role in this growth.
In the energy market, benchmark U.S. crude rose by 32 cents to $75.41 a barrel, and Brent crude, the international standard, increased by 28 cents to $80.32 a barrel.
In currency trading, the U.S. dollar edged up to 147.65 Japanese yen from 147.51 yen, and the euro cost $1.0891, up from $1.0884.
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