“Beijing could deploy as much as 6 trillion yuan ($842.9 billion) in new fiscal stimulus, but the fund will be more of a ‘risk package’ to recapitalize banks, clean up sold but unfinished homes and cover hidden debts of local governments to alleviate. This is to solve deflationary pressures, not yet to stimulate consumption.”
Hang Seng index falls under pressure from the global market
The Hang Seng Index extended its losing streak to three weeks, falling 1.03%. The Hang Seng Index succumbed to rising US Treasury yields, pushing the Dow Jones and S&P 500 into negative territory.
Real estate and technology stocks contributed to the decline. The Hang Seng Mainland Properties Index (HMPI) fell 2.04%, while the Hang Seng Tech Index (HSTECH) fell 1.37% for the week.
Technology giants Baidu (9888) and Alibaba (9988) fell 6.70% and 5.12% respectively. Real estate stocks, however, saw heavier losses, with Shimao Group Holdings (0813) falling 19.86% in the week ending October 25.
On the mainland, PBoC stimulus measures and hopes for further policy announcements boosted demand for mainland China-listed stocks. The CSI 300 gained 0.79%, while the Shanghai Composite rose 1.17%.
Commodity markets: crude oil, iron ore and gold
Hopes of further stimulus from Beijing pushed iron ore prices higher. The amount of iron ore increased by 3.19% this week. Gold rose 0.96% to reach a record high of $2,758.
Moreover, WTI Crude also ended the week higher. Notably, WTI Crude Oil rose 2.27% on Friday alone, closing the week at $71.78. Concerns about a possible disruption of supplies from the Middle East pushed oil prices higher.
ASX 200 ends the week in negative territory
The ASX 200 fell 0.87% in the week ending October 25, reversing a 0.84% gain from the previous week. Rising US Treasury yields impacted buyer demand for banking and technology stocks.
The S&P/ASX All Technology Index ended the week down 1.67%. Australian banking stocks National Australia Bank (NAB) and Westpac Banking Corp. (WBC) fell by 0.59% and 0.83% respectively.
Meanwhile, gold-related stocks responded to spot gold price trends, with Northern Star Resources Ltd. (NST) recorded an increase of 7.08%. Mining giants BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) ended the week with gains thanks to higher iron ore spot prices.
Nikkei index ahead of general election
In the week ending October 25, the Nikkei index fell 2.74% despite a weaker Japanese yen. The USD/JPY rose 1.87% on the week, reaching a mid-week high of 153.184 before easing again. Higher yields on US government bonds and uncertainty about the elections in Japan impacted demand for shares listed on the Nikkei Index.
Notable share price moves included SoftBank Group Corp. (9984), which fell 3.59%, while Tokyo Electron (8035) fell 1.19%. Nissan Motor Corp. (7201) gained 0.10%, with the weaker yen boosting demand for export-related stocks.
Outlook
Investors must remain vigilant with the stimulus measures from Beijing, the conflict in the Middle East and the US presidential elections in their sights. For the Nikkei, Japanese election results and the Bank of Japan’s penultimate interest rate decision for 2024 require consideration. Stay up to date with our latest news and analysis to manage positions in the Asian stock markets.