2024-10-14 04:23:00
Asian stock markets fluctuated on Monday as investors remained uncertain about the impact of China‘s recently announced economic stimulus measures.
Finance Minister Lan Foan, in a news conference Saturday, pledged a significant increase in debt to boost the economy, but gave no details on the size of the stimulus. This lack of detail has investors wondering about the potential length of the recent stock market rally.
Analysts at Morgan Stanley have noted a clear gap in perception between onshore and offshore investors regarding the importance of Beijing’s decision to restructure the real estate sector and local government debt using central government funds.
This gap was evident as Hong Kong stocks started the day slightly lower and showed volatility in early trading, while mainland Chinese stocks opened with a strong performance. The index registered a marginal decline of 0.01% and the blue chip index increased by 1.6%.
Real estate stocks in both regions, however, posted solid gains, with the Hang Seng Mainland Properties Index rising 2.2% and the CSI300 Real Estate Index rising 3.7%. These moves suggest that investors are optimistic that stimulus measures could support China’s struggling real estate sector.
Overall market sentiment in the region was cautious, with MSCI’s broadest index of Asia-Pacific shares outside Japan falling 0.11%, following a 1.7% decline last week, while the rally in Chinese stocks came to a halt. Trading in Asia was lighter than usual due to the holiday in Japan.
U.S. stock futures also fell slightly, with U.S. stock futures down 0.1% and Nasdaq futures down 0.25%. Futures in Europe showed a slight downtrend, with EUROSTOXX 50 futures down 0.08% and FTSE futures down 0.05%.
Adding to concerns about China’s economic outlook, data released on Sunday pointed to an unexpected slowdown in consumer inflation in September, while producer price deflation worsened. The onshore yuan weakened 0.11% to 7.0743 against the US dollar, while the offshore yuan fell further 0.2% to 7.0828 per dollar.
Oil prices also fell more than $1 a barrel on Monday on concerns about falling Chinese demand. Crude oil futures fell 1.32% to $78.00 a barrel, while West Texas Intermediate crude futures fell 1.3% to $74.58 a barrel.
Despite these concerns, Goldman Sachs analysts raised their real GDP forecast for China this year to 4.9% from 4.7%, citing recent stimulus announcements. However, they have maintained their structural view on China’s growth, pointing to long-term challenges such as demographics, debt relief and global supply chain adjustments that are unlikely to be mitigated by policy easing. China’s third-quarter GDP data is expected to be released on Friday.
In currency markets, the US dollar remained strong, supported by reduced expectations of a significant interest rate cut by the Federal Reserve next month. The dollar index was near a seven-week high at 103.03, following data last week pointing to a slight rise in consumer prices in September and reports highlighting a robust labor market.
The pound and euro fell against the dollar, with the pound falling 0.13% to $1.3050 and the euro falling 0.11% to $1.0923. Investors are also keeping an eye on upcoming inflation data from the UK and an interest rate decision from the European Central Bank later in the week.
Reuters contributed to this article.
This news was translated with the help of artificial intelligence. For more information, please see our Terms of Use.
#Asian #stocks #reel #uncertainty #Chinese #stimulus #Investing.com