Asian markets displayed a mixed performance on Monday, influenced by a range of factors from economic policies in China to political leadership in Japan. Chinese equities surged sharply, buoyed by new stimulus initiatives from the government aimed at revitalizing the economy. In contrast, Japan’s market suffered considerable losses as investor sentiment wavered following the election of a new Prime Minister who expressed intentions to shift the country’s monetary policy toward normalization.
The Shanghai Composite Index finished the day up 8.75%, reaching 3,357.20 points, while the Shenzhen Component saw a notable increase of 10.88%, closing at 10,550. Additionally, the Hang Seng Index in Hong Kong rose by 3.97%, closing at 21,450. These gains have been attributed to the People’s Bank of China’s commitment to stimulating economic growth in response to sluggish indicators.
Recent data from China indicated a slight improvement in the Manufacturing Purchasing Managers’ Index (PMI), which increased to 49.8 in September compared to 49.1 in August, though this still falls below the crucial 50-point level that separates expansion from contraction. However, the Non-Manufacturing PMI dipped from 50.3 to 50.0, signaling caution in the services sector. Other measures, including the Caixin Manufacturing PMI and Services PMI, both saw declines during the month.
In Japan, the election of Shigeru Ishiba as Prime Minister prompted a sell-off in major indices. The nikkei 225 dropped by 4.80% to 37,919, while the broader Topix lost 3.63%, closing at 2,641. Ishiba’s statements suggesting a need to normalize monetary policy and increase financial income taxes spooked investors, leading to the significant market downturn.
Meanwhile, Indian markets also faced challenges, with the Nifty 50 down by 1.02% to 25,912 and the BSE Sensex 30 falling 1.12% to 84,630. Despite these fluctuations, the Indian rupee has remained stable against the US dollar throughout the year, with only a slight depreciation of 0.59%. Economic forecasts from officials predict India’s economy will grow at a rate between 6.5% and 7.0% for the current financial year, maintaining optimism amidst the prevailing market conditions.
