Asian Shares Mixed Amid China Stimulus Push

Asian stocks traded mixed this morning, with Chinese and Hong Kong markets rising sharply, spurred by rare fiscal measures from Beijing to address the ongoing severe liquidity crunch in the domestic property market as well as to stem the stock market’s sell-off.

China’s national legislature has just approved a budgetary plan to raise the fiscal deficit ratio for 2023 to about 3.8 percent of its GDP – well above the 3 percent set in March.

China’s Shanghai Composite index was up over 1 percent at 2,992 while Hong Kong’s Hang Seng index jumped 2.4 percent to 17,394.

Japan’s Nikkei average climbed 1.2 percent to 31,421 after the Nikkei reported that the government is considering spending around $33 billion for pay-outs to low-income households and an income tax cut in a package of measures to cushion the blow to households from rising living costs.

Seoul stocks were moving lower, with the Kospi average down 0.3 percent as investors awaited major corporate earnings.

Australia’s benchmark S&P/ASX 200 slipped 0.2 percent after data showed inflation rose more than expected in the three months till September, bolstering the case for the country’s central bank to raise interest rates next month after four meetings of status quo.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index was down 0.7 percent at 10,879.

Oil prices were little changed in Asian trading after falling sharply on Tuesday, as weak business activity data from Asia and Europe dampened the outlook for energy demand.

Gold edged up on softer dollar and weaker U.S. Treasury yields as global leaders continued their efforts to prevent the Israel-Hamas war from spreading.

After U.S. business activity ticked higher in October, investors now await the release of the US GDP numbers for the third quarter on Thursday and the PCE price index on Friday for additional clues on the rate outlook.

U.S. stocks closed higher overnight as bond yields stabilized and investors cheered strong earnings from the likes of GE, Coca-Cola, Spotify and 3M.

The Dow climbed 0.6 percent to snap a four-day losing run, while the S&P 500 gained 0.7 percent and the tech-heavy Nasdaq Composite rallied 0.9 percent.

European stocks rose for the first time in five days on Tuesday as investors looked ahead to the ECB monetary policy announcement and key U.S. economic data due later in the week.

The pan European STOXX 600 edged up 0.4 percent. The German DAX rose half a percent, France’s CAC 40 added 0.6 percent and the U.K.’s FTSE 100 edged up 0.2 percent.

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