Asian Shares Rise as China Signals Need for Economic Stimulus

BANGKOK -- Asian shares kicked off the week on a positive note, with Chinese stocks increasing by more than 1% after the country's finance minister indicated that additional support for the economy is necessary.

U.S. futures remained relatively stable, and oil prices experienced a decline.

Over the weekend, China’s finance minister hinted at exploring further options for stimulating the economy, although specific details regarding a substantial new stimulus plan were not revealed. Investors and analysts had been optimistic about a potential plan worth up to 2 trillion yuan (approximately $280 billion).

Typically, any indication of support for the economy tends to boost stock prices, and state-owned companies and financial institutions often intervene by purchasing stocks to help stabilize the market, according to analysts.

“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 in a commentary. “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 3,271.06, while the Shenzhen market saw a gain of 1.9%. However, Hong Kong’s Hang Seng index decreased by 0.4% to 21,164.93.

Recent reports from China indicate a decline in consumer inflation for September and continued decreases in wholesale prices, which reflect ongoing weakness in domestic demand. This situation has prompted the government to take measures aimed at revitalizing falling housing sales and increasing consumer spending.

Despite extensive Chinese military exercises conducted around Taiwan and its nearby islands on Monday, there appeared to be a minimal impact on the markets.

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

The positive trend in Asia followed a strong finish on Wall Street last Friday, where U.S. stocks reached record highs, buoyed by robust earnings from major banks.

The S&P 500 climbed by 0.6% to 5,815.03, surpassing its previous all-time high set earlier that week and marking its fifth consecutive winning week. The Dow Jones Industrial Average rose by 1% to a record level of 42,863.86. The Nasdaq composite lagged behind with a modest gain of 0.3% as a notable decline in Tesla's shares prevented it from gaining more traction. Its final close was at 18,342.94.

Wells Fargo shares jumped by 5.6% after reporting better-than-expected profits for the latest quarter. Similarly, JPMorgan Chase saw a 4.4% increase following a less severe drop in profits than what analysts had anticipated, becoming a key driver behind the S&P 500's upward movement.

BlackRock also experienced a 3.6% increase after exceeding profit expectations for the latest quarter. The investment management firm reported managing a record $11.5 trillion in customer assets by the end of September.

The rally in bank stocks helped counterbalance Tesla's significant 8.8% drop following the introduction of its long-awaited robotaxi, which critics noted lacked specifics regarding its rollout. In contrast, potential competitor Uber Technologies soared by 10.8%, significantly contributing to the rise of the S&P 500, while Lyft shares increased by 9.6%.

In the bond market, Treasury yields showed mixed results following new updates on wholesale inflation and consumer sentiment.

Prices that producers received increased by 1.8% in September compared to the previous year, marking an improvement though falling short of economists' expectations.

Turning to other early Monday developments, U.S. benchmark crude oil prices fell by 91 cents to $74.65 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international benchmark, dropped by 95 cents to $78.09 per barrel.

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

Stocks, Asia, Economy