Asian Markets Rise as China Signals Need for More Economic Support

BANGKOK -- Asian shares opened the week on a positive note, with significant gains, particularly in China where stocks rose more than 1%. This uptick follows comments from the country’s finance minister over the weekend, indicating that additional stimulus measures are being considered to support the slowing economy.

U.S. futures showed little change, while oil prices experienced a decline.

During a press conference on Saturday, China's finance minister noted that the government was exploring various strategies to enhance economic growth. However, he did not provide specific details about a potential new stimulus package. Investors and analysts are hopeful for measures that could reach up to 2 trillion yuan, which is approximately $280 billion.

Analysts suggest that even hints of support from the government typically lead to an increase in stock prices. Additionally, state-owned companies and financial institutions, referred to as the “national team,” often intervene with stock purchases to help stabilize the market.

“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,” remarked Stephen Innes from SPI Asset Management. He continued, “By mid-week, we’ll see if the market bid has legs, and by the end of the month, 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 an increase of 1.7%, reaching 3,271.06, while the smaller Shenzhen market gained 1.9%. In contrast, Hong Kong’s Hang Seng index experienced a minor decline of 0.4%, settling at 21,164.93.

Recent reports from China indicated a decline in consumer inflation for September, alongside falling wholesale prices. These figures reflect ongoing weakness in domestic demand, prompting the government to implement various measures aimed at reviving decreasing housing sales and stimulating other forms of spending.

Despite large-scale military exercises by China in the vicinity of Taiwan and its surrounding islands on Monday, market reactions appeared to be minimal.

Taiwan's Taiex index increased by 0.4%. Tokyo’s markets, however, were closed due to a public holiday. Meanwhile, South Korea’s Kospi rose by 1%, reaching 2,622.43, and Australia’s S&P/ASX 200 gained 0.5%, ending the day at 8,253.60.

This positive trend in Asia came after a strong finish on Wall Street last Friday, where U.S. stock markets closed at record highs, buoyed by impressive earnings reports from major banks.

The S&P 500 advanced by 0.6% to reach 5,815.03, surpassing its previous all-time record and concluding its fifth consecutive week of gains. The Dow Jones Industrial Average also rose by 1%, setting a new record at 42,863.86, while the Nasdaq composite lagged slightly with a modest 0.3% increase, ending at 18,342.94 partly due to an 8.8% decline in Tesla shares.

Wells Fargo saw a surge of 5.6% following better-than-expected profits for the latest quarter. Similarly, JPMorgan Chase climbed 4.4% after reporting a smaller decline in profits than analysts had anticipated, acting as a key driver for the S&P 500's upward movement.

BlackRock experienced a rise of 3.6%, boosted by its better-than-expected quarterly profits, concluding September with a record $11.5 trillion in total assets under management.

The gains recorded by banks helped offset Tesla's drop after the electric vehicle manufacturer introduced its long-awaited robotaxi, with critics calling out the lack of details regarding its launch plan.

In competition, rival Uber Technologies saw its stock jump by 10.8%, contributing to its positive momentum, while Lyft shares rose by 9.6%.

In the bond market, Treasury yields showed mixed results following the latest inflation data and updates on consumer sentiment in the U.S.

Prices for producers rose by 1.8% in September compared to the previous year, a modest improvement though not as robust as economists had predicted.

In the early hours of Monday trading, U.S. benchmark crude oil fell by 91 cents to $74.65 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, which serves as the international standard, dropped 95 cents to $78.09 per barrel.

The U.S. dollar increased against the Japanese yen, trading at 149.30 versus 149.08 late Friday, while the euro decreased to $1.0926 from $1.0935.

Asian, Stocks, China