Asian stocks advanced in trading on Monday, following a volatile start to the day. China made significant policy rate cuts in an effort to address disinflation and stimulate economic recovery, which boosted market sentiment. These developments coincided with positive momentum from Wall Street, where markets closed with their strongest weekly gain this year, driven by resilient corporate earnings.
By mid-morning, Australia’s S&P ASX 200 had climbed by 65 points, marking a 0.79% increase to reach 8,348. Meanwhile, Japan’s Nikkei 225 rose by 77 points, or 0.20%, bringing it to 39,058. In China, the CSI 300 initially surged by 1%, though it later eased slightly to a 0.85% increase, buoyed by the central bank’s decisive rate cuts.
China’s central bank lowered the one-year loan prime rate from 3.35% to 3.10%, and the five-year loan prime rate was reduced from 3.85% to 3.60%. These reductions were larger than the expected 20 basis point cuts that economists had predicted, signalling a robust intervention aimed at addressing economic slowdown. This move came in response to China’s GDP growth of 4.6% in the third quarter, which represented the slowest expansion since March 2023. Additionally, industrial production in China rose by 5.4% compared to the previous year, surpassing economists’ expectations of 4.6% growth.
Across the US, markets ended last week with notable gains, registering the best performance in 2024. Optimism around corporate earnings and economic growth pushed stock benchmarks to new highs, with the S&P 500 recording its 47th all-time high this year. Investors are now turning their attention to the earnings reports of companies such as Tesla Inc. and Boeing Co. this week, particularly as both companies face scrutiny over recent production challenges and delays.
In the oil market, prices remained stable despite heightened geopolitical tensions. Israel has vowed to retaliate against Iran following a drone attack on the residence of Prime Minister Benjamin Netanyahu, an incident that came shortly after Israel’s killing of Hamas leader Yahya Sinwar. As of 6:00 a.m. IST, Brent crude was trading at $73.20 per barrel, reflecting a 0.19% increase, while West Texas Intermediate saw a 0.26% rise, reaching $69.40 per barrel.
Fidelity Asian Values Plc (LON:FAS) provides shareholders with a differentiated equity exposure to Asian Markets. Asia is the world’s fastest-growing economic region and the trust looks to capitalise on this by finding good businesses, run by good people and buying them at a good price.
