Hong Kong’s Hang Seng Index surged over 5% on Wednesday, marking its sixth consecutive day of gains and reaching a 22-month high. The rally was fueled by optimism surrounding Beijing’s recent stimulus measures aimed at boosting the economy. Property developers led the charge, with China Vanke, Longfor Group, and Logan Group seeing significant gains of 40%, 32%, and 31%, respectively. These gains came after several major cities in mainland China introduced policies over the weekend to boost homebuyer confidence.
Chinese technology companies also enjoyed a boost, with shares of Meituan, Baidu, and JD.com climbing by more than 10%. Markets in mainland China were closed for the Golden Week holiday but had already rallied earlier in the week, experiencing their best day in 16 years after Beijing introduced stimulus measures that included interest rate cuts and lower reserve requirements for banks. These moves are intended to inject liquidity into the market and stimulate investment.
Despite the positive sentiment in Hong Kong, market experts expressed caution. James Sullivan of JPMorgan told CNBC’s “Street Signs Asia” that the key question remains whether these stimulus measures will translate into increased consumer demand or remain focused on supply-side solutions. “That’s not our expectation right now,” Sullivan remarked, indicating uncertainty over whether the measures will lead to sustainable growth.
Meanwhile, other Asia-Pacific markets showed mixed results on Wednesday. Australia’s S&P/ASX 200 fell slightly by 0.13%, closing at 8,198.2. South Korea’s Kospi Index dropped by 1%, and Japan’s Nikkei 225 fell sharply by 2.18%, closing at 37,808.76, following the news of newly appointed Prime Minister Shigeru Ishiba taking office.
In South Korea, traders assessed consumer inflation data, which showed a 1.6% increase in September, lower than expected. Additionally, factory activity in the country contracted at its fastest pace in 15 months, as demand for overseas goods slowed.
Global markets remain volatile, with tensions escalating in the Middle East after Iran launched missile strikes on Israel. Oil prices and the CBOE Volatility Index jumped as concerns over a broader regional conflict grew. Israeli Prime Minister Benjamin Netanyahu vowed retaliation, warning Iran that it had made a “big mistake.”
In the U.S., investors are looking ahead to the September jobs report, which will provide further insight into the state of the labor market. Amid growing tensions and economic uncertainty, the report could signal how markets might navigate the ongoing volatility.
