BANGKOK — Global stock markets experienced a positive shift as China’s central bank unveiled new measures aimed at bolstering the stock market through share repurchases by corporations and key shareholders.
European markets opened on a high note, with Germany’s DAX climbing 0.2% to 19,623.37. The CAC 40 in Paris saw a 0.4% increase, reaching 7,615.72, while Britain’s FTSE 100 edged down by 0.1% to 8,376.04.
The European Central Bank’s decision to cut its main interest rate by a quarter percentage point further fueled this upward momentum in shares.
Futures for the S&P 500 were up slightly less than 0.1%, while the Dow Jones Industrial Average remained relatively stable.
On Friday, Beijing reported a slowdown in the Chinese economy during the last quarter, intensifying expectations that the government will enhance its stimulus measures. The world’s second-largest economy registered a 4.6% annual growth rate for July-September, a decrease from 4.7% in the prior quarter.
Overall growth this year has averaged 4.8%, falling short of the official target of approximately 5%, as a persistent weakness in the property sector continues to hinder demand.
In addition, the central bank released guidelines for state banks to facilitate loans for companies and shareholders engaging in stock repurchases, an attempt to stabilize China’s struggling share markets. These loans can only be issued by 21 designated financial institutions with a maximum interest rate of 2.25%, emphasizing stringent oversight of this market support initiative.
This announcement prompted a surge in Shanghai’s market, where the Composite index rose by 2.9% to 3,261.56, and the smaller Shenzhen market gained 4.1%. Despite the Shanghai benchmark’s 9% gain over the past three months, it faced fluctuations following earlier government measures aimed at addressing the slowdown, disappointing some investors due to a lack of substantial government spending.
Hong Kong’s Hang Seng index also reflected this positive trend, increasing by 3.6% to 20,791.20.
In another significant development, China’s major state-owned banks announced cuts in their deposit rates, reducing demand deposit rates from 0.15% to 0.1% and long-term deposits from 1.35% to 1.1%.
In broader Asia, Tokyo’s Nikkei 225 rose 0.2% to 38,981.75, while Seoul’s Kospi dipped 0.6% to 2,593.82. Australia’s S&P/ASX 200 fell 0.9% to 8,283.20, whereas Taiwan’s Taiex gained 1.9%, and Bangkok’s SET index saw a 0.3% increase. India’s Sensex rose by 0.2%.
In the U.S., stocks continued to hover near record levels, with the S&P 500 finishing nearly unchanged at 5,841.47 and the Dow Jones Industrial Average gaining 0.4% to 43,239.05, setting a new record. The Nasdaq composite edged up less than 0.1% to 18,373.61, buoyed by gains in the chip sector following strong quarterly profits reported by major companies.
In bond markets, Treasury yields increased thanks to positive developments in the U.S. economy. September retail sales exceeded August figures, accompanied by stronger-than-expected growth trends. Additionally, fewer workers sought unemployment benefits last week, indicating a resilient job market and stable employment conditions.
These trends build optimism regarding the economy’s potential to navigate away from decades-high inflation rates without triggering a recession, especially as the Federal Reserve implements interest rate cuts to sustain economic momentum. Some market analysts, however, caution that stock prices may be overstretched given their rapid ascent compared to corporate profit growth.
Early Friday trades saw U.S. benchmark crude oil prices stable at $70.67 per barrel, while Brent crude fell slightly to $74.42 per barrel.
The dollar slipped to 150.11 Japanese yen from 150.21 yen, and the euro climbed to $1.0844 from $1.0827.
