Asia Stocks Climb as CPI Takes Center Stage; China Sees Volatility Amid Stimulus Discussions

Most Asian stocks experienced modest gains on Thursday as attention shifted to crucial U.S. inflation data that could influence interest rate decisions. In China, markets exhibited significant fluctuations following indications from Beijing advocating for additional fiscal stimulus measures.

Regional markets were buoyed by a positive performance on Wall Street, where the Dow Jones Industrial Average reached a record closing high. This was in reaction to the minutes from the Federal Reserve’s September meeting, which suggested a preference among policymakers for a 50 basis point cut.

However, U.S. stock index futures remained flat during Asian trading, as the minutes also revealed that the Fed had not made any commitments regarding the timing of further interest rate cuts.

### Volatility in Chinese Stocks Amid Stimulus Doubts

The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes in China experienced around 1% volatility in turbulent trading after a sharp decline the previous day. This drop persisted even after the finance ministry announced plans for a briefing on Saturday to discuss fiscal stimulus aimed at bolstering growth.

The announcement followed an earlier briefing on Tuesday that addressed monetary stimulus measures, which had largely disappointed investors. Chinese markets had already seen a steep decline from two-year highs on Wednesday, leading to skepticism about the extent of support the government would provide, particularly given the rising levels of national debt.

In Hong Kong, the Hang Seng index surged 2.5%, recovering from significant losses earlier in the week. Trip.com Group Ltd was a standout performer, rising over 5% after Citi raised its earnings forecasts for the company. The Chinese markets also received a boost from the People’s Bank of China, which injected 500 billion yuan into capital markets as liquidity support.

### Broader Asian Markets and Focus on Consumer Inflation Data

Broader Asian markets showed slight increases on Thursday, with a keen focus on the U.S. consumer price index inflation data expected later in the day, which could provide further insights into the trajectory of interest rates.

Japan’s Nikkei 225 index rose by 0.3%, while the TOPIX added 0.2%. However, gains in Japan were tempered by data indicating a larger-than-expected increase in producer price index inflation for September, suggesting potential inflationary pressures ahead.

Optimism regarding China also lifted Australia’s ASX 200 index by 0.6%, considering the country’s significant trade ties with the mainland. Meanwhile, South Korea’s KOSPI rose by 0.5%, benefiting from catch-up trading following a holiday on Wednesday.

In India, futures for the Nifty 50 index indicated a flat start, as the index struggled to recover from a decline from its recent record highs.