Chinese Stocks Gain in Volatile Trade, Oil Falls: Markets Wrap

By Investor Empires On Oct 14, 2024

(Bloomberg) — Chinese stocks erased declines to advance in choppy trading as investors weighed the impact of measures announced by the Finance Ministry to revive growth.

Most read from Bloomberg

The local stock index rose as much as 1.7%. The yuan fell as oil fell, reflecting doubts among some traders that Beijing’s latest efforts will be enough to stimulate growth. European stock futures stabilized, while US contracts and the euro declined.

While Chinese Finance Minister Lan Fuan pledged more support for the real estate sector at a press conference expected over the weekend, he did not release a key figure on monetary stimulus. The focus now turns to the next major political briefing in the coming weeks – from the Communist Party-controlled parliament that oversees the budget – for details on further support.

“Sentiment has returned to optimism, but it will also go into see-and-believe mode awaiting actual numbers and more details on consumption and ownership measures, which have been missing,” said Shen Yao Ng, investment director at abrdn Asia. Ltd. “The Ministry of Finance did everything it could to give the market the hope it was looking for.”

Ahead of the weekend conference, money managers were waiting for more financial measures to help sustain the rally sparked by the authorities’ stimulus campaign in late September. Investors and analysts surveyed by Bloomberg had expected China to deploy up to 2 trillion yuan ($283 billion) in new fiscal stimulus on Saturday, including potential subsidies, consumption vouchers and financial support for families with children.

The CSI 300, an index of domestic stocks, capped its biggest weekly loss since late July on Friday, while the Australian and New Zealand dollars – proxies for Chinese sentiment among developed market currencies – fell for two weeks in a row.

“There will be a consolidation and a pullback,” Wendy Liu, chief equity strategist for Asia and China at JPMorgan Chase & Co., told Bloomberg TV. “Structurally, it looks good. In the short term, it’s not satisfactory.”

Policymakers from Thailand, the Philippines and Indonesia will issue interest rate decisions ahead of the European Central Bank meeting later this week.

The European Central Bank is likely to boost global efforts to ease monetary restrictions by lowering interest rates, something policymakers ruled out just a month ago.

Concerns over French financial conditions and German distress sent the euro lower on Monday, while French bond futures were little changed. The region’s largest economy is experiencing a moderate recession, and output through all of 2024 will be flat, according to a Bloomberg survey.

“Weaker activity data and faster inflation deceleration clearly had an immediate impact on both ECB communications and markets, which are now pricing in a 95% probability of a 25 basis point cut this week,” Barclays strategists, including Themistocles Viotakis, wrote. , in a note. For customers. “We view risks to European macroeconomic and interest rates as skewed to the downside, creating room for further euro weakness, especially on crosses.”

The dollar rose as traders reduced expectations about the pace of interest rate cuts by the Federal Reserve. Cash Treasuries in Asia are closed due to a holiday in Japan.

Aside from central bank policy decisions, Chinese growth and retail sales data are due this week, while inflation readings are expected in New Zealand, Canada and the UK.

Main events this week:

China’s trade balance, Monday
Consumer price index in India, Monday
UK unemployment rate and average weekly earnings, Tuesday
Industrial production in the eurozone, Tuesday
Canadian Consumer Price Index, Tuesday
Goldman Sachs, Bank of America, Citigroup earnings, Tuesday
Bloomberg Editor-in-Chief John Micklethwait interviewed Republican presidential candidate Donald Trump at the Economic Club of Chicago on Tuesday.
New Zealand Consumer Price Index, Wednesday
Interest rate decisions of the central banks of Thailand, the Philippines and Indonesia, Wednesday
UK CPI, Producer Price Index, Consumer Price Index and House Price Index, Wednesday
ASML, Morgan Stanley earnings, Wednesday
Unemployment in Australia, Thursday
Eurozone consumer price index and the European Central Bank’s interest rate decision, Thursday
US Retail Sales, Unemployment Claims, Industrial Production, Business Inventories, Thursday
TSMC and Netflix earnings Thursday
Japanese Consumer Price Index, Friday
China GDP, retail sales, industrial production, house prices, Friday
UK retail sales, Friday

Some key movements in the markets:

Stocks

S&P 500 futures were little changed as of 2:40 PM Tokyo time
Nikkei 225 futures rose 0.4%.
There was little change in the Hang Seng Index in Hong Kong
The Shanghai Composite Index rose 2.1%.
Euro Stoxx 50 futures were little changed

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1 percent to $1.0924
There was little change in the Japanese yen at 149.25 to the dollar
The yuan in external transactions fell 0.2 percent to 7.0833 per dollar

Cryptocurrencies

Bitcoin rose 1.7% to $63,789.47
Ethereum rose 2.1% to $2,510.87

Bonds

Goods

This story was produced with assistance from Bloomberg Automation.

–With assistance from Matthew Burgess and Zhou Lin.