Asian stocks experienced significant gains on Tuesday, with Chinese shares leading the rally following positive signals around new stimulus measures from China. The country’s government signalled during a Politburo meeting that it would implement more fiscal stimulus and adopt looser monetary policies in 2025, helping to boost investor sentiment. This optimism helped offset concerns from a weak performance in U.S. stocks, which saw losses in technology shares, resulting in U.S. benchmarks retreating from their record highs.
The Shanghai Composite index rose by 1.6%, and the Shanghai Shenzhen CSI 300 index saw an even bigger jump of more than 2%. This momentum spread throughout other Asian markets, with investors hopeful that China’s efforts to stimulate its economy would boost global demand. At the same time, fears of a potential trade war between the U.S. and China remained an underlying concern, as incoming U.S. President Donald Trump vowed to impose additional tariffs on Chinese exports.
Other Asian markets, including Hong Kong’s Hang Seng index, which gained 1.5%, and South Korea’s KOSPI index, which rebounded by 2.4%, also showed signs of positive movement. Japan’s Nikkei 225 and TOPIX saw modest increases of 0.2% and 0.3%, respectively. Singapore’s FTSE Straits Times and the Philippines’ PSEi Composite index also posted gains. However, India’s Nifty 50 Futures indicated a slight dip at open.
Meanwhile, in Australia, the Reserve Bank of Australia (RBA) opted to keep interest rates steady at a 12-year high of 4.35% during its December meeting, as anticipated. The RBA signalled that it needed to be sure that inflation was sustainably under its target range before making any further changes. This decision came despite a weak growth report for Australia’s economy in the September quarter. The RBA remains focused on bringing inflation back to its target range of 2% to 3%.
Australia’s S&P/ASX 200 saw little change after the RBA’s announcement, edging down by 0.2%. However, mining stocks saw a significant boost, with major players like Rio Tinto, BHP Group, and Fortescue rising between 4% and 7%, benefiting from the optimism surrounding China’s stimulus plans. Conversely, technology stocks saw a decline, following the previous day’s losses in the tech-heavy NASDAQ Composite index.
The rally in Asian stocks, particularly driven by optimism about China’s stimulus measures, reflects a positive outlook for the region, even as challenges such as potential trade tensions with the U.S. and ongoing domestic issues in countries like South Korea continue to pose risks.
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