Markets in mainland China and Hong Kong rallied on Friday after the world’s second-largest economy posted stronger-than-expected economic growth figures for the third quarter. China’s gross domestic product (GDP) grew by 4.6% year-on-year, slightly surpassing economists’ expectations from a Reuters poll, though down from the 4.7% growth in the previous quarter. This growth, while notable, marks the lowest quarterly increase since mid-2023 and falls short of Beijing’s annual growth target of 5%.
The September data offered further positive signs, with retail sales rising 3.2% year-on-year, beating analyst estimates. Additionally, industrial output for the same month grew by 5.4%, a faster pace than anticipated, further boosting investor confidence. However, the real estate sector continued to struggle, as China’s house prices dropped by 5.8% in September, a larger decline compared to the 5.3% fall in August, reflecting ongoing challenges in the property market.
Mainland China’s CSI 300 index surged 4.4%, putting it on track to achieve its best trading day since October 8, when markets gained 6%. In Hong Kong, the Hang Seng index also experienced a significant rise, climbing 3.8% as investors responded positively to the encouraging economic data.
Meanwhile, other major markets in the Asia-Pacific region showed mixed results. In Japan, headline inflation for September stood at 2.5%, while core consumer price inflation (CPI), excluding fresh food, grew by 2.4% year-on-year, just above the estimated 2.3%. Despite inflationary pressures, Japan’s Nikkei 225 index rose modestly by 0.18% to close at 38,981.75, with the broader Topix index also posting a slight gain to end at 2,688.97.
In South Korea, markets saw a dip, with the Kospi index slipping by 0.59% to close at 2,593.85, and the smaller Kosdaq dropping 1.55% to 753.22. Similarly, Australia’s S&P/ASX 200 index fell by 0.87%, ending the day at 8,283.2.
Overnight in the U.S., the Dow Jones Industrial Average rallied to a new record high following positive economic data that alleviated fears of a potential recession. The Dow gained 161 points, or 0.37%, to close at 43,239.05. The S&P 500 saw a slight dip, falling 0.02% to 5,841.47 after hitting an intraday record, while the Nasdaq Composite inched up by 0.04% to finish at 18,373.61. All three major U.S. indexes are on track to log their sixth consecutive week of gains.
Investors across the globe continue to monitor economic data closely, with China’s recovery efforts and inflation figures shaping market sentiment.
