Asian Stock Market: China equities support regional markets

Asian stock markets advanced on Monday, following US equities with mild gains despite the hawkish statement from the US Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Symposium. In his statement on Friday, Powell suggested that US interest rates might increase further in order to address persistent inflation. The Asian equities begin the week on a positive note as the Chinese authorities unveiled fresh measures designed to rebuild confidence.

At the time of writing, China’s Shanghai is up 2.30% to 3,134, the Shenzhen Component Index rises 2.38% to 10,371, Hong Kong’s Hang Seng advances 1.71% to 18,263, South Korea’s Kospi is up 0.81%, Japan’s Nikkei rises 1.64% and Taiwan's Weighted Index is up 0.25%.

Over the weekend, Beijing implemented a measure to reduce the stamp duty on stock trading by 0.1%, aiming to boost investors’ confidence. The China Securities Regulatory Commission has reported that local stock exchanges have also reduced their margin financing requirements.

Investors had previously perceived Beijing's attempts to bolster the economy through earlier measures as relatively ineffective. Consequently, they urged the Chinese authorities to introduce more focused fiscal support to the nation’s economic conditions.

Beijing additionally revealed a relaxation of mortgage regulations to strengthen the Real Estate sector, a move that bolstered Real Estate equities in China. The deceleration of the real estate market has posed a significant challenge to the Chinese economy, as this sector plays a crucial role in driving growth. Market participants will closely watch China's services and manufacturing PMIs later in the week for further indication of the country’s economic conditions.