Asian Shares Rise as China Signals Need for Economic Stimulus

BANGKOK -- Asian shares gained on Monday, following a positive signal from China regarding its economy. Stocks in China increased by more than 1% after the finance minister stated over the weekend that additional measures are necessary to support the slowing economic growth.

While U.S. futures remained steady and oil prices saw a slight decline, the mood in Asia was generally upbeat.

The finance minister's comments indicated that the Chinese government is exploring new ways to energize the economy. However, no specifics about a significant new stimulus plan were provided. Investors and analysts are optimistic about a potential stimulus package worth up to 2 trillion yuan, approximately $280 billion.

Such supportive statements often lead to a rise in stock prices. Additionally, analysts believe that major state-owned companies and financial institutions, known as the “national team,” tend to intervene in the market by purchasing stocks, which helps stabilize prices.

“The devil is always in the details—or, in this case, the lack of details. Chinese policy announcements often lack the substance investors are looking for,” said Stephen Innes from SPI Asset Management. “By the middle of the week, we will see if the market rally has staying power, and by the end of the month, we’ll know whether Beijing will follow up with concrete actions or if it's just empty promises.”

The Shanghai Composite index experienced a 1.7% increase, reaching 3,271.06, while the smaller Shenzhen market rose by 1.9%. In contrast, Hong Kong’s Hang Seng index dropped by 0.4% to 21,164.93.

Recent data from China showed a decrease in consumer inflation for September, along with a further drop in wholesale prices. These statistics highlight ongoing weakness in domestic demand, prompting government officials to implement various measures aimed at revitalizing the housing market and other consumer spending areas.

On Monday, large-scale Chinese military exercises around Taiwan did not seem to affect the markets significantly.

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

The positive morning for Asian markets followed a strong performance on Wall Street, where U.S. stocks reached record highs on Friday, buoyed by solid profits from large banks.

The S&P 500 index closed up 0.6% at a new all-time high of 5,815.03, marking its fifth successive week of gains. The Dow Jones Industrial Average surged by 1% to a record 42,863.86. The Nasdaq composite, however, only managed a modest 0.3% increase, closing at 18,342.94, as a decline in Tesla’s stock held it back.

Wells Fargo shares rose by 5.6% after exceeding analysts' profit expectations for the latest quarter, while JPMorgan Chase's stock climbed 4.4%, thanks to a smaller-than-anticipated profit drop. These banks were significant contributors to the upward movement of the S&P 500.

BlackRock shares also increased by 3.6% after reporting better-than-expected earnings for the last quarter. The investment company ended September with an impressive total of $11.5 trillion in assets under management.

However, Tesla's shares slumped by 8.8% following the introduction of its highly anticipated robotaxi, which faced criticism for lacking crucial rollout details. In contrast, competitors like Uber Technologies saw stock prices soar by 10.8%, while Lyft shares rose by 9.6%.

Meanwhile, the bond market experienced mixed Treasury yield movements after recent inflation updates for wholesale prices and consumer sentiment in the U.S.

Producers paid 1.8% more in September compared to the previous year, an improvement that was still below economists’ expectations.

As the week progresses, crude oil prices saw declines, with U.S. benchmark crude dropping 91 cents to $74.65 per barrel in electronic trading. International benchmark Brent crude fell 95 cents to $78.09 per barrel.

The dollar rose slightly against the Japanese yen, trading at 149.30 yen compared to 149.08 yen late Friday. The euro, on the other hand, declined to $1.0926 from $1.0935.

Stocks, Markets, Economy