Asian stocks rise on China stimulus cheer; Australia trims losses after RBA

Most Asian stocks rose on Tuesday with Chinese markets leading gains on reports of more stimulus measures from Beijing, while Australian markets trimmed their losses after the Reserve Bank held rates steady.

Regional markets took some positive cues from mild overnight gains on Wall Street, with U.S. markets remaining in sight of record highs. But Wall Street futures retreated in Asian trade, suggesting that a recent rally may now be stalling. 

Most Asian markets were sitting on strong gains from the past week, as investors cheered a bumper interest rate cut by the Federal Reserve. Focus this week is on more cues from the Fed and the U.S. economy. Chinese stocks surge on stimulus 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose more than 2% each, while Hong Kong’s Hang Seng index rose rallied over 3% and was the best performer in Asia. 

Chinese officials unveiled a slew of planned measures to further spur economic growth, with the People’s Bank set to cut reserve requirements for banks by 50 basis points to unlock more liquidity.

For the ailing property market, the government said it would reduce mortgage rates for existing loans. Bloomberg reported that the government was planning at least 500 billion yuan ($70.8 billion) of liquidity support for local stocks. 

Tuesday’s moves come after the PBOC had on Monday cut a short-term repo rate to further boost liquidity. The moves are aimed squarely at shoring up economic growth, as the Chinese economy struggles with persistent disinflation and an extended property market downturn. 

The CSI300 and SSEC indexes both hit near eight-month lows in recent sessions, while the Hang Seng was also nursing losses. 

Broader Asian markets advanced. Japan’s Nikkei 225 index rose 0.8%, while the TOPIX added 0.5%, as purchasing managers index data showed the country’s services sector grew more than expected in September. 

But Japanese manufacturing activity shrank for a third consecutive month. 

South Korea’s KOSPI traded flat, while futures for India’s Nifty 50 index pointed to a slightly weak open, with the index facing resistance in the run-up to 26,000 points.  Australian stocks trim losses after RBA holds

Australia’s ASX 200 lagged their Asian peers, falling 0.2%, although the did trim some losses after the RBA held rates steady as expected.

The RBA said that inflation still remained too high and that it was "not ruling out" any measures to curb price pressures. But the central bank did not provide any explicit signals on how rates will move in the coming months.

Still, with the RBA forecasting that inflation will only fall within its target range sustainably by 2026, analysts do not expect any easing measures until at least the first quarter of 2025, if not later.

Monthly consumer price index inflation data, due on Wednesday, is set to offer more cues on the Australian economy. 

Source: Investing.com