Asian stocks rally on Chinese stimulus

Asian stock markets experienced a surge on Thursday, primarily driven by a rally in Chinese equities, as the People’s Bank of China (PBC) launched a new 500 billion-yuan (approximately $70 billion) funding facility aimed at boosting capital markets.

This move, announced as part of a broader stimulus package, has instilled optimism among investors.

The Chinese blue-chip CSI300 index rose by 1.7 per cent in early trading, rebounding from a significant drop the previous day. Hong Kong’s Hang Seng index also gained 2.5 per cent, extending its year-to-date increase to 24 per cent.

This positive sentiment lifted MSCI’s broadest index of Asia-Pacific shares outside Japan by 0.76 per cent, while Japan’s Nikkei rose 0.5 per cent.

Investors are eagerly awaiting a finance ministry press conference on Saturday, where details of the fiscal stimulus plan will be revealed.

Economists from ING believe that more concrete information on spending levels will encourage other policymakers to implement supportive measures.

Oil prices rose due to tensions in the Middle East and increased demand from a storm hitting Florida. Brent crude futures increased by 0.4 per cent to $76.86 a barrel, while US West Texas Intermediate (WTI) futures rose by 0.37 per cent to $73.5 a barrel.

Attribution: Reuters

Subediting: M. S. Salama