Asia-Pacific Markets Ascend on China Stimulus Hopes; Hong Kong Eyes 3% Rally

By Claire Morgan

Oct 28th, 2024

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Asia-Pacific markets are gearing up for what promises to be a day of encouraging gains, bolstered by positive sentiment stemming from China's recent stimulus measures. Investors across the region are hopeful that these initiatives will provide the much-needed boost to the Chinese economy, which in turn would have favorable implications for neighboring economies. The focus today is primarily on the Hong Kong and Japanese markets, as well as key developments in the U.S.

Hong Kong's Hang Seng index is expected to open on a positive note, with futures trading at 20,575—indicating a strong potential climb of more than 3% upon market opening. This optimism is largely fueled by Chinese government actions aimed at economic revitalization and is reflective of a broader week-long uptrend for Chinese stocks.

In Japan, the investor community is eagerly awaiting the release of September's inflation figures for Tokyo, seen as a critical predictor for country-wide trends. Economist estimates suggest the core inflation rate—excluding volatile fresh food prices—will stand at 2%, slightly lower than the previous month’s rate of 2.4%. Meanwhile, futures predict a positive start for Japan's Nikkei 225, with numbers pointing to a stronger market performance compared to its last close.

Australia's S&P/ASX 200 index may also witness record-setting highs, with futures suggesting a level of 8,278, potentially surpassing its all-time high of 8,246.2. This uptick would reinforce the strong performance the Australian market has experienced in recent sessions.

Across the Pacific, U.S. markets have laid a solid foundation for this upbeat sentiment in the Asia-Pacific region. All three major U.S. indices achieved gains overnight, with the S&P 500 reaching a new record high. Contributing to this uplift were better-than-expected jobless claims, indicative of a resilient U.S. labor market, and a solid GDP growth of 3% for the second quarter.

Investment opportunities appear ripe as market dynamics continue to be influenced by these global economic pointers. Investors are cautioned to remain vigilant, however, as the market sentiment can shift with the emergence of new data or geopolitical developments. Nonetheless, the optimistic outlook for the Asia-Pacific markets remains, driven largely by China's fiscal policies and supported by core American economic strength.

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