Investing.com—Most Asian stocks rose on Monday, while Chinese markets experienced sharp fluctuations after mixed signals from Beijing about fiscal stimulus plans, amidst disappointing inflation data.
Trading activity was light due to a holiday in Japan.
Regional markets were inspired by Wall Street’s record highs on Friday, driven by positive earnings from major banks.
China Stocks Volatile Amid Stimulus and Weak Inflation
Chinese stocks showed volatility in morning trading, with major indexes like the Shanghai Shenzhen CSI 300 and Shanghai Composite swinging before settling about 0.2% higher.
China’s finance ministry announced plans for fiscal stimulus, including more debt issuance and support for provincial governments, but lacked specifics on timing and scale, causing market enthusiasm to wane.
Analysts warn that these moves may significantly increase government debt, with investors concerned about China’s ability to implement this stimulus given high existing debt levels.
Recent economic data from China indicated ongoing weakness, with consumer inflation unexpectedly falling in September and producer inflation declining for the 23rd straight month.
Hong Kong markets reflected mixed views on China, with the Hang Seng plummeting over 2% amid volatility.
Chinese stocks had seen strong gains in previous weeks due to an earlier announced monetary stimulus, but the lack of clear details has dampened this rally.
More economic indicators are expected from Chinese trade data released later on Monday.
Asia Stocks Track Wall Street Gains
Asian markets advanced, following positive trends on Wall Street. Australia’s ASX 200 rose 0.4%, buoyed by hopes for more stimulus from China, its largest trading partner.
Nikkei 225 Futures dropped 0.4%, with Japanese markets closed for the holiday.
South Korea’s KOSPI gained 0.4%, while India’s Nifty 50 index futures signaled a negative start, struggling around the 25,000 point mark.
Later today, Indian consumer inflation data is expected to show a sharp rise for September.
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