Asian stocks continued their upward trend on Friday, fueled by increased risk appetite across financial markets following China’s recent stimulus measures and positive momentum from the US.
The People’s Bank of China reduced the reserve requirement for banks, injecting approximately $142.6 billion (£106.6 billion) into the financial market as part of a significant initiative to stimulate economic growth. Additionally, the bank lowered the seven-day reverse repo rate—the short-term interest rate on loans from commercial lenders—from 1.7% to 1.5%.
China’s benchmark CSI 300 Index was on track for its largest weekly gain since 2008 after officials committed to enhancing fiscal support and stabilizing the property sector to encourage growth. The Hang Seng Index in Hong Kong surged 3.7% to 20,659.03, while the Shanghai Composite Index rose 2.1% to 3,065.29.
However, the Shanghai Stock Exchange experienced technical glitches that disrupted order processing and caused delays at the market’s opening. This led to a 6.4% rise in the Shenzhen Index, as local media reported a rush of investors into that smaller market during the outage. Trading normalized by noon, and the Shanghai Stock Exchange later stated that it was still investigating the issues.
In Japan, the Nikkei 225 Index gained more than 1% amid a leadership election by the ruling Liberal Democratic Party to determine the next prime minister. The change in leadership is not anticipated to result in significant policy shifts, given the similarities among the leading candidates.
Australia’s S&P/ASX 200 rose nearly 0.1% to 8,208.70, while South Korea’s Kospi dipped 0.2% to 2,666.01.
On Wall Street, the S&P 500 achieved a record closing high, with the Dow and Nasdaq also making gains. The S&P 500 closed up 0.4% at 5,745.37, the Dow Jones Industrial Average rose 0.6% to 42,175.11, and the Nasdaq Composite increased by 0.6% to 18,190.29.
The yield on 10-year US Treasury notes, which influence global investment decisions, climbed to 3.80% on Thursday evening, up from 3.79% late on Wednesday.
