Asian Stocks Rise on US Inflation Ease, China Gains Momentum

On Wednesday, Asian stocks climbed as US inflation eased interest rate concerns, and China’s central bank injected liquidity, boosting risk appetite.

China’s Shanghai Shenzhen CSI 300 rose 0.70% to CN¥3,607.25, and the Shanghai Composite indexes surged by 0.55% to CN¥3,072.83. Hong Kong’s Hang Seng outperformed all Asian stocks by increasing 3.71% to HK$18,071.00, also gaining from strong tech stocks.

Technology stocks saw significant gains, following their US peers as the weak inflation data pulled down Treasury yields. South Korea’s Kospi is up by 2.20% to ₩2,486.67, while Japan’s Nikkei 225 increased by 2.51% to ¥33,517.50.

India’s Nifty 50 soared by 1.10% to ₹19,658.35, driven by tech stocks like Infosys Ltd and Wipro Ltd impacting the index. Australia’s ASX 200 also gained by 1.42% to AU$7,105.90.

Asian stocks rose, fueled by a 600-billion-yuan ($82.7 billion) injection from the People’s Bank of China (PBOC), maintaining unchanged medium-term lending rates.

However, fixed asset investment weakened, dropping 2.9% from the earlier 3.1%, and property sales saw a 20.33% year-over-year (YoY) decline compared to September’s 19.77%.

Analysts suggest a gradual shift towards a more positive trajectory, indicating progress unfolding at a measured pace. However, the economy requires ongoing PBOC liquidity support and a marginally more supportive fiscal stance from the central government.

China’s Robust Growth Lifts Asian Stocks

The PBOC’s liquidity injection showed some resiliency in the Chinese economy, pulling Asian stocks to surge.

Analysts’ missed prediction on China’s industrial production data increased by 4.6% to the 4.4% forecast. While retail sales significantly surged by 7.6% to 7.0%, experts’ outlook.

According to a recent report, Beijing plans 1 trillion yuan ($137 billion) in low-cost financing to bolster the housing market.

Meanwhile, the Chinese yuan hit its three-month high of CN¥7.23 per greenback despite declining 0.25% in the Asian afternoon session.

Economists note Beijing’s recent proactive measures to bolster the recovery, indicating a clear shift towards more intervention in recent weeks. Despite property sector uncertainties, experts anticipate Beijing will persist in enhancing support, utilizing fiscal and monetary measures to address challenges.