In the week ending October 4, the Hang Seng Index rose 10.20%, after rising 13% the week before. Beijing’s stimulus measures went against expectations of a less flexible interest rate policy by the Fed and the escalation of the conflict in the Middle East.
Stocks related to the real estate and technology sectors continued to benefit from the shift in demand for listed shares from Hong Kong and the mainland.
The Hang Seng Tech Index (HSTECH) ended the week 17.38% higher, after rising 20.23% the week before. Tech stock gainers included Baidu (9888) and Alibaba (9988), which rose 11.12% and 9.84% respectively, while Tencent (0700) gained 9.06%.
The Hang Seng Mainland Properties Index (HMPI) rose 16.39% this week, following the previous week’s 30.64%. Real estate stocks on the move included Longfor Group Holdings Ltd. (0960) (+23.62%), Shimao Group Holdings Ltd. (0813) (+137.78%) and Agile Group Holdings Ltd. (3383) (+169.84%).
On the mainland, the CSI 300 rose 8.48%, while the Shanghai Composite gained 8.06% on Monday, September 30. Chinese markets were closed for the rest of the week due to the National Day.
Commodities are diverging amid geopolitical tensions
Chinese policy measures continued to push iron ore prices higher on expectations of increased demand. Spot iron ore rose 6.71% during Monday’s trading session ahead of the Chinese holiday.
An escalation of conflict in the Middle East pushed oil prices higher, while gold fell 0.18% to $2,653 in the week ending October 4. US labor market data and a resurgent US dollar kept gold in negative territory.
ASX 200 Risk Aversion Slides
The ASX 200 fell 0.76% in the week ending October 4. Falling bets on a 50 basis point Fed rate cut and conflict in the Middle East left the Index in negative territory.
Australian banks in particular tumbled, with Westpac Banking Corp. (WBC) and ANZ (ANZ) posted losses of 5.22% and 2.63% respectively. Diminishing expectations of a 50 basis point Fed rate cut dampened demand for high-yield stocks.
Mining stocks also contributed to the weekly loss. BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) saw weekly losses of 0.36% and 2.96% respectively. Risk aversion hit mining stocks, with investors holding on to gains from the previous week.
However, oil stocks rose in parallel with crude oil prices, with Woodside Energy Group Ltd. (WDS) 9.36% won.
Nikkei index falls despite weak yen
An escalation of the conflict in the Middle East affected the demand for shares listed on the Nikkei Index. The Index fell 3% despite USD/JPY rising 4.57% to end the week at 148.656.
Notable price moves included Tokyo Electron (8035), which fell 7.72%, while Softbank (9984) fell 5.85%. Nissan Motor Corp. (7201) and Sony Corp. experienced a loss of 3.22% and 3.29% respectively.
Outlook
As Chinese markets reopen after the national holidays, traders should closely monitor news, real-time data and expert commentary to adjust trading strategies accordingly. Stay up to date with our latest news and analysis to manage positions in the Asian stock markets.