Asian Stock Markets rise on optimism from China
2023.01.16 01:29
Asian Stock Markets rise on optimism from China
Budrigannews.com – On Monday, the majority of Asian stock markets rose, with Chinese indexes leading the way after the government implemented additional stimulus measures. On the other hand, local stocks fell as investors worried about the Bank of Japan taking further hawkish stances.
After the People’s Bank of China added more liquidity to the banking system, China’s blue-chip index surged 2% to a near five-month high, making it the best performer in Asia. The move comes before the lunar new year holiday, when liquidity is expected to rise.
The liquidity injection was interpreted by the markets as a sign that the Chinese government intends to implement additional spending measures as the nation battles its COVID-19 outbreak, which is currently the worst.
With the country reopening its borders last week, it is also anticipated that the Chinese economy will eventually recover this year following the relaxation of the majority of anti-COVID measures. Consequently, local stock prices have surged since December.
While Hong Kong’s index climbed 0.7% to a six-month high, the index gained 1.6%.
Other markets exposed to China rose as well. Australia’s index went up 0.8%, while the US index went up 0.6%.
In contrast, this week’s spike in anticipation of a saw Japan’s index fall 1.2%. As local inflation reached over 40-year highs in December, the central bank is under increasing pressure to tighten policy.
Investors were preparing for a similar move later this week after the bank unexpectedly adopted a hawkish tone in December.
That reached a 41-year high in December, according to data on Monday. Data due later this week are expected to show a similar trend.
The continued bets that the in the coming months contributed to the rise of broad Asian stocks.
Now comes a slew of important economic data that will be released later this week. Markets are wary of a slowdown in other major economies, particularly as the effects of severe monetary policy tightening through 2022 are felt, even though China’s economy is expected to recover this year.
Markets are also paying attention to corporate earnings reports for the fourth quarter to see if weakening economic trends have a negative impact on major companies’ bottom lines.
