Asian Shares Rise as China Calls for Economic Stimulus

BANGKOK -- Asian shares began the week on a positive note, with stocks in China rising over 1% after the finance minister announced the need for more economic stimulus to support the slowing economy.

In contrast, U.S. futures remained relatively stable and oil prices saw a decline.

During the weekend, China’s finance minister revealed that the government is exploring additional measures to boost economic growth. However, he did not provide specifics on any new major stimulus plan. Investors and analysts were hoping for a large stimulus, speculated to be around 2 trillion yuan (approximately $280 billion).

Despite the absence of detailed plans, the mere suggestion of government support typically results in a rise in stock prices. Analysts note that significant state-run companies and financial institutions, referred to as the “national team,” often step in to buy stocks to stabilize the markets.

Stephen Innes of SPI Asset Management commented on the situation, stating, "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 surged 1.7% to 3,271.06, while the Shenzhen market climbed 1.9%. Conversely, Hong Kong’s Hang Seng index experienced a slight decline, falling 0.4% to 21,164.93.

China recently reported a decrease in consumer inflation for September and a further drop in wholesale prices. These trends indicate ongoing weakness in domestic demand, prompting the government to implement a series of measures to rejuvenate declining housing sales and consumer spending.

Notably, large-scale military exercises by China around Taiwan and its nearby islands on Monday had little impact on market performance.

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

This upward trend in Asian markets followed a strong performance on Wall Street the previous Friday, where U.S. stocks reached record highs after impressive earnings from major banks.

The S&P 500 increased by 0.6% to 5,815.03, breaking its previous all-time high from earlier in the week and marking its fifth consecutive week of gains. The Dow Jones Industrial Average rose 1% to set a new record at 42,863.86. The Nasdaq composite, however, saw a smaller gain of 0.3%, largely due to a decline in Tesla shares, closing at 18,342.94.

Wells Fargo shares climbed 5.6% after reporting better-than-expected profits for the latest quarter. JPMorgan Chase saw a 4.4% increase following a smaller-than-anticipated profit drop. These results played a key role in driving the S&P 500 higher.

Additionally, BlackRock's shares rose 3.6% after also exceeding profit expectations, concluding September with a record $11.5 trillion in assets under management.

The rise in banking stocks helped offset Tesla's significant decline of 8.8% after the company unveiled its highly anticipated robotaxi. Critics pointed out the lack of details regarding its launch, raising concerns.

Following the announcement of Tesla's "Cybercab," Uber Technologies' stock surged 10.8%, one of the key contributors to the S&P 500's performance, while Lyft shares increased by 9.6%.

In the bond market, U.S. Treasury yields displayed mixed trends following recent inflation updates and consumer sentiment data.

Moreover, prices for goods at the wholesale level were reported to be 1.8% higher in September compared to the previous year, which is an improvement but still lower than economists' expectations.

On the commodities front, U.S. benchmark crude oil saw a decline of 91 cents to $74.65 per barrel in electronic trading on the New York Mercantile Exchange, while Brent crude fell by 95 cents to $78.09 per barrel.

In foreign exchange markets, the dollar strengthened to 149.30 Japanese yen from 149.08 on Friday, while the euro slipped to $1.0926 from $1.0935.

Stocks, Market, Economy