Global markets are experiencing a mixed response following China’s recent wave of stimulus measures, Reuters reports.
While Chinese stocks have continued to rise, with mainland blue-chips gaining up to 3.4% and Hong Kong’s Hang Seng climbing as much as 3.1% in today’s session, the broader impact on global markets appears to be fading.
On Tuesday, China’s announcement of its most significant stimulus since the pandemic sparked a surge, with Chinese blue-chips up 4.3% and the Hang Seng gaining 4.1%. This rally initially lifted stock benchmarks in Australia and South Korea, two economies closely linked to China. However, those gains soon tapered off, and the optimistic mood began to wane.
Analysts have raised questions about whether the stimulus measures address China’s deeper structural economic challenges. This uncertainty may be contributing to more subdued market reactions outside of China. On Wall Street, US stocks advanced only modestly on Tuesday, with gains between 0.2% and 0.5%. US futures now point to slightly lower openings, reflecting concerns over the weakening of consumer confidence and the potential for a US economic slowdown.
In Europe, futures also signal a lower start for stocks. Economic concerns remain prominent in the region, as inflation and slowing growth continue to weigh on investor sentiment. Today’s key developments include policy announcements from Sweden’s Riksbank, which is expected to cut interest rates by 25 basis points, and speeches from the European Central Bank’s Elizabeth McCaul and the Bank of England’s Megan Greene.
The global easing cycle, with central banks around the world reducing interest rates to support growth, continues to shape market sentiment. The People’s Bank of China added to Tuesday’s rate cuts with another reduction today, and traders are anticipating another large interest rate cut from the US Federal Reserve in November. Fed Governor Adriana Kugler is scheduled to speak later today, with Fed Chair Jay Powell’s remarks set for Thursday, providing further insights into the central bank’s outlook.
