(ATF) Hong Kong: Stimulus hopes attracted investors back to risk assets after US House Speaker Nancy Pelosi extended the deadline for an agreement on stimulus after President Donald Trump said he could convince Republicans to back a so-called “good” deal.
“The possibility of a fresh fiscal stimulus shot in the US – the world’s largest economy – is acting as a catalyst in driving global stocks higher,” the chief executive of deVere Group Nigel Green said.
“Investors are moving now to buy stocks to bolster their portfolios ahead of the announcements in the coming days when prices will jump even higher – so they’re taking advantage of what they see as the current lower entry points.”
But Chinese stocks underperformed after the world’s second largest economy reported a weaker-than-forecast GDP growth for the third quarter.
Japan’s Nikkei 225 index surged 1.11%, Australia’s S&P ASX 200 jumped 0.85% and Hong Kong’s Hang Seng index added 0.64% but China’s CSI300 retreated 0.76%.
Alicia Garcia Herrero, Natixis' Chief Economist for Asia Pacific, said China’s 4.9% growth in third quarter GDP was below market expectation and also below Natixis' expectation of 5.2%.
“All in all, given the weaker-than-expected GDP performance in Q3, we have revised our GDP forecast for 2020 slightly downwards to 2%,” Garcia Herrero said.
The yuan also took a hit trading at 6.70 to a dollar from 6.69 before the data.
The risk on mood meant investors dumped US Treasuries with the 10-year yields rising 3 bps to 0.77%
ATF China Bond 50 Index: ATF indexes steady ahead of GDP, LPR setting and CCP gathering
Also on Asia Times Financial:
· Japan’s Nikkei 225 index surged 1.11%
· Australia’s S&P ASX 200 jumped 0.85%
· Hong Kong’s Hang Seng index added 0.64%
· China’s CSI300 retreated 0.76%
· The MSCI Asia Pacific index soared 1.16%.
Stock of the day
Sun Art Retail surged as much as 29.9% after e-commerce giant Alibaba said it will spend about $3.6 billion to take a 72% controlling stake in the big-box and supermarket chain.