Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Asian stocks surge on US inflation relief, China stimulus moves

Published 15/11/2023, 03:18
Updated 15/11/2023, 03:18
© Reuters

Investing.com-- Most Asian stocks rose sharply on Wednesday as weak U.S. inflation data pushed up hopes of no more interest rate hikes, while a massive liquidity injection by China’s central bank also boosted risk appetite. 

Technology stocks saw outsized gains, tracking their U.S. peers as the weak inflation data bought down Treasury yields. 

This was accompanied by a 600 billion yuan ($82.7 billion) liquidity injection by the People’s Bank of China, as it left medium-term lending rates unchanged. The liquidity injection was aimed chiefly at shoring up sluggish economic growth by encouraging more lending in the country. 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.9% and 0.5%, respectively. Hong Kong’s Hang Seng index rallied 2.7% and was the best performer in Asia for the day, also benefiting from strength in heavyweight tech stocks.

The PBOC’s liquidity injection was accompanied by data showing some resilience in the Chinese economy, as industrial production and retail sales grew more than expected in October. 

But other indicators still showed some weakness in the economy, as fixed asset investment slowed and property sales continued to decline. 

“The general sense is that things are moving slowly in a more positive direction, but that the economy still needs the liquidity support that the PBOC seems to be starting to provide, and the slightly more helpful fiscal stance that the central government is taking,” analysts at ING wrote in a note. 

Asian tech surges as weak CPI dents rate hike bets 

Tech-heavy Asian bourses were the best performers for the day, with South Korea’s KOSPI up 2.1%, while Japan’s Nikkei 225 added 2.2%.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Futures for India’s Nifty 50 index also pointed to a positive open, particularly on strength in heavyweight tech stocks such as Infosys Ltd (NS:INFY) and Wipro Ltd (NS:WIPR).

Regional tech stocks tracked overnight gains in their U.S. peers, after data showed that U.S. consumer inflation grew less than expected in October. The reading ramped up hopes that the Federal Reserve will have little impetus to increase interest rates further.

This notion bought down Treasury yields, which were a major source of pressure on the tech sector this year. 

Other Asian markets also logged strong gains. Australia’s ASX 200 surged 1.5% to a near two-month high, while Indonesian stocks led gains across Southeast Asia with a 1.5% rise. 

Japanese shares rally as weak GDP feeds dovish BOJ bets 

Japan’s Nikkei 225 was among the best performers for the day, rallying 2.2% despite a weaker-than-expected gross domestic product reading for the third quarter.

GDP shrank 0.5% against expectations for a drop of 0.1%. 

But the reading highlighted the need for more supportive measures for the Japanese economy, and pushed up hopes that the Bank of Japan will further delay its exit from its ultra-dovish stance. 

A dovish BOJ was one of the biggest factors behind a Japanese stock rally this year, given that it was among the few major central banks that was still keeping interest rates at ultra-low levels.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.