Asia Stocks Rise as CPI Takes Center Stage; China Declines Amid Fiscal Stimulus Discussions

Asian stocks generally rose on Thursday, driven by anticipation of key U.S. inflation data that could influence interest rate decisions. However, Chinese markets declined despite the government announcing plans for additional fiscal stimulus.

Regional markets were buoyed by positive momentum from Wall Street, where the Dow Jones Industrial Average reached a record closing high. This increase followed the release of the Federal Reserve’s September meeting minutes, which revealed a consensus among policymakers for a potential 50 basis point interest rate cut.

In contrast, U.S. stock index futures remained stagnant during Asian trading, as the minutes indicated that the Fed has not committed to a specific timeline for rate cuts.

Chinese Stocks Decline Amid Stimulus Doubts

The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes each fell approximately 0.7% in volatile trading, extending their losses from a sharp decline the previous day. These losses occurred despite announcements from the finance ministry that it would hold a briefing this Saturday to discuss upcoming fiscal stimulus measures aimed at stimulating economic growth.

This news follows a previous briefing on Tuesday regarding monetary stimulus efforts, which left investors feeling disappointed. Consequently, Chinese markets have dropped significantly from two-year highs reached earlier in the week. Investor confidence has waned regarding the extent of support that Beijing may provide, especially as the country faces rising debt levels.

On a positive note, the Hang Seng index in Hong Kong surged by 2.5%, recovering from earlier declines. Trip.com Group led gains on the index, climbing over 5% following a lift in earnings estimates from Citi.

Chinese markets also received a boost from the People’s Bank of China, which injected 500 billion yuan (approximately $70.69 billion) into capital markets.

Asian Markets Rise, CPI in Focus

Overall, Asian markets saw modest gains on Thursday, with attention shifting to the upcoming U.S. consumer price index (CPI) inflation data for insights into potential interest rate movements.

Japan’s Nikkei 225 index rose 0.3%, while the TOPIX recorded a 0.2% increase. However, gains were restrained by data showing a higher-than-expected increase in producer price index inflation in September, raising concerns about rising inflation pressures in Japan.

Positive sentiments regarding China supported a 0.6% increase in Australia’s ASX 200, given the country’s significant trade ties with the mainland. Meanwhile, South Korea’s KOSPI added 0.5%, benefiting from a catch-up in trading following a holiday.

Futures for India’s Nifty 50 index indicated a flat opening as the index was recovering from recent declines after hitting record highs in the previous week.