Asian Shares Rise as China Signals Need for Economic Stimulus

BANGKOK -- Asian shares started the week positively, with stocks in China climbing over 1% after the country’s finance minister announced on the weekend that additional support for the slowing economy was necessary.

In the U.S., futures remained relatively stable while oil prices experienced a decline.

The finance minister's comments included indications that the government was exploring new methods to boost economic activity, although specific details about any significant stimulus plan were not provided. Investors had been anticipating a potential stimulus package totaling up to 2 trillion yuan, approximately $280 billion.

Any signal of governmental support usually results in an uptick in stock prices. Analysts highlight that the so-called “national team” — comprised of major state-run companies and financial institutions — tend to intervene in the market by purchasing stocks when needed to help stabilize prices.

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 rose by 1.7% to close at 3,271.06, while the Shenzhen market saw an increase of 1.9%. In contrast, Hong Kong’s Hang Seng index dipped by 0.4% to 21,164.93.

Recent economic data from China showed a decline in consumer inflation for September and further drops in wholesale prices, indicating a sustained weakness in domestic demand. This has led the government to implement various measures aimed at reviving sluggish housing sales and boosting overall spending.

Despite large-scale military exercises conducted by China around Taiwan and its nearby islands on Monday, these activities seemed to have minimal effect on market movements.

Taiwan's Taiex index saw a rise of 0.4%. Meanwhile, Japanese markets were closed due to a public holiday. In South Korea, the Kospi index increased by 1% to 2,622.43, and Australia's S&P/ASX 200 added 0.5% to reach 8,253.60.

The positive momentum in Asia followed a strong performance on Wall Street last Friday, where U.S. stocks hit record highs, buoyed by solid earnings from major banks.

The S&P 500 index rose by 0.6% to an all-time high of 5,815.03, marking its fifth consecutive week of gains. The Dow Jones Industrial Average climbed 1% to establish a new record at 42,863.86. The Nasdaq composite lagged slightly behind, increasing by only 0.3% due to a decline in Tesla's stock, closing at 18,342.94.

Wells Fargo's shares jumped by 5.6% after it reported stronger-than-expected profits for the last quarter. JPMorgan Chase's stock rose by 4.4% after showing a less severe profit drop than feared, serving as a significant upward force for the S&P 500.

BlackRock also shares increased by 3.6% after reporting better-than-expected profits while managing a record $11.5 trillion in total assets by the end of September.

The gains in the banking sector helped counterbalance Tesla's 8.8% drop after it introduced its much-anticipated robotaxi, which critics felt lacked sufficient rollout details.

Following the unveiling of the “Cybercab,” Uber Technologies saw a surge in its stock, rising 10.8% and contributing to the S&P 500’s upward movement, while Lyft gained 9.6%.

In the bond market, Treasury yields displayed a mixed performance following updates on inflation and consumer sentiment in the U.S.

Producer prices increased by 1.8% in September compared to the previous year, showing improvement, although it fell short of economists’ expectations.

On Monday morning, U.S. benchmark crude oil fell by 91 cents, trading at $74.65 per barrel. In addition, Brent crude, the international benchmark, decreased by 95 cents to $78.09 per barrel.

The dollar appreciated against the yen, rising to 149.30 from 149.08, while the euro slipped to $1.0926 from $1.0935.

Asia, China, Stocks