Asian markets showed mixed reactions on Thursday, with Chinese stocks leading the gains after Beijing unveiled supportive policies to boost struggling markets. Hong Kong witnessed a 1.4% rise, while Shanghai surged by 2%. However, benchmarks in Tokyo and Seoul experienced declines.
Late on Wednesday, the Chinese central bank announced a series of measures, including rules governing lending to property developers and a reduction in bank reserve requirements, injecting approximately 1 trillion yuan ($141 billion) into the economy. These steps aim to address challenges faced by the Chinese economy, which is grappling with slowed growth, forecasted below 5% for the year.
Chinese property developers, including China Evergrande Holdings and Country Garden, saw their shares rise in response to the government’s support measures.
In Tokyo, the Nikkei 225 slipped 0.3% to 36,134.82, and South Korea’s Kospi lost 0.4% to 2,459.97. Sydney’s S&P/ASX 200 edged up 0.1% to 7,526.90.
The positive sentiment in Chinese markets contrasted with Tokyo and Seoul, where speculation about the Bank of Japan ending its negative rate policy later this year has left investors cautious.
On Wall Street, the S&P 500 set a record for the fourth consecutive day, adding 0.1% to reach 4,868.55. The Nasdaq composite rose 0.4% to 15,481.92, driven by gains in tech stocks. Meanwhile, the Dow Jones Industrial Average fell 0.3% to 37,806.39.
Netflix surged 10.7% after reporting higher subscriber additions than expected for the last quarter of 2023. Dutch semiconductor supplier ASML also contributed to the tech sector’s positive performance, reporting stronger-than-expected profit and revenue, leading to an 8.9% jump in its U.S.-listed stock.
The positive economic outlook was reinforced by a preliminary report indicating accelerated growth in business output, reaching a seven-month high. Prices charged by businesses rose at the slowest rate since May 2020, according to the report from S&P Global. The expectation of multiple interest rate cuts this year has contributed to the recent record highs in the stock market.
In energy trading, U.S. crude added 31 cents to $75.40 a barrel, and Brent crude rose 27 cents to $79.90 a barrel. The U.S. dollar edged up against the Japanese yen and the euro.
Economic reports later in the week, including GDP growth estimates for the end of 2023 and the latest update on the preferred inflation measure by the Federal Reserve, could further influence expectations for interest rate cuts in the coming months.
