Asian Markets Soar as China Unveils Sweeping Stimulus Package
A wave of optimism swept across Asian markets on Wednesday, driven by China’s bold stimulus package aimed at reviving its economy. The Shanghai Composite Index surged 3.1%, building on Tuesday’s 4.3% gain, while Hong Kong’s Hang Seng Index rose 2.2%. The rally spilled over to other regional markets, with Taiwan’s benchmark climbing 1.3% and South Korea’s Kospi edging up 0.1%.
The People’s Bank of China’s decision to cut medium-term lending rates to banks added fuel to the fire, bolstering investor confidence. The stimulus package, which includes measures to boost the stock market and support the struggling property sector, has sparked hopes of a sustained economic recovery.
Analysts noted that investors are piling into Chinese stocks, driven by the promise of easier monetary policy and government support. “The focus in Asia remains firmly on China, and investors are buying into the rally, even as they question its sustainability,” said one analyst.
The dollar, meanwhile, came under pressure following weak US macroeconomic data, which boosted expectations of another aggressive interest rate cut by the Federal Reserve. The euro and sterling both gained, while the yen retreated as investors sought riskier assets.
Gold prices hit an all-time high, driven by safe-haven demand and expectations of easier monetary policy. Brent crude oil prices hovered near a three-week high, supported by hopes of stronger economic growth.
In Australia, the dollar initially surged to its highest level since February 2022 but later retreated after inflation data showed some cooling, potentially paving the way for an earlier rate cut by the Reserve Bank.
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