Chinese stocks posted their strongest week in nearly 16 years, with the CSI 300 index climbing 15.7% amid sweeping economic stimulus measures from the central bank. This marks the best weekly performance for the index since November 2008. Hong Kong’s Hang Seng Index also saw significant gains, rising 12.31%, its highest weekly increase since 1998.
On Friday, the CSI 300 closed 4.47% higher at 3,703.68, its highest point in a year, while the Hang Seng Index rose 3.13%. These gains follow the People’s Bank of China (PBOC) cutting its 7-day reverse repurchase rate from 1.7% to 1.5% and lowering the reserve requirement ratio (RRR) for financial institutions by 0.5 percentage points. The PBOC stated that the measures aim to create a favorable financial environment for stable economic growth and high-quality development.
Despite the rally, China’s August industrial profits revealed a 17.8% year-on-year drop, signaling economic challenges ahead. Investors will closely monitor upcoming data to gauge the full impact of the stimulus measures.
Asia-Pacific Markets Mostly Rise
Other Asian markets mirrored China’s optimism. Japan’s Nikkei 225 surged 2.32%, hitting its highest level since July, while the broader Topix index rose 0.73%. Tokyo’s inflation data for September showed easing headline inflation at 2.2%, down from 2.6% in August, with core inflation at 2%.
In contrast, South Korea’s Kospi fell 0.82%, and the Kosdaq dropped 0.6%. Australia’s S&P/ASX 200 edged up 0.10%, remaining close to its all-time high.
Global Market Response
U.S. markets also reacted positively to encouraging economic data, with the S&P 500 reaching a new record, gaining 0.40%, while the Nasdaq rose 0.60%. The Dow Jones advanced 0.62%, supported by falling jobless claims and stable GDP growth at 3% for the second quarter.
With a mix of global economic optimism and fresh stimulus, investors remain cautiously optimistic about the market outlook for the remainder of the year.
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