Asian markets continued to rally during Friday's session, with Hong Kong’s Hang Seng index surging 4.2%, while Chinese stocks marched higher in response to new stimulus measures introduced by Beijing to bolster the economy.
Mainland China's CSI 300 climbed 1%, capping off a week of solid performance.
Despite the market rally, China’s industrial profits for August posted a steep 17.8% year-on-year decline, following a 4.1% increase in July - the highest in five months.
For the first eight months of 2024, profits at large industrial firms grew by a modest 0.5%, reaching 4.65 trillion yuan ($663.47 billion), down from the 3.6% growth reported in the first seven months.
Investors are closely watching the impact of China’s latest policy moves, with key data yet to reflect the full effects of Tuesday’s stimulus measures. The People's Bank of China cut the 7-day reverse repo rate to 1.5% from 1.7%, marking the second reduction in three months.
The central bank also lowered the reserve requirement ratio by 0.5 percentage points to further ease liquidity and support economic growth. Following the adjustment, the weighted average deposit reserve ratio now stands at 6.6%.
In Japan, the Nikkei 225 rose by 0.1%, while the broader Topix index fell 0.6% after the release of Tokyo’s inflation data. Tokyo’s headline inflation eased to 2.2% in September from 2.6% in August, while core inflation, excluding fresh food prices, aligned with expectations at 2%, down from 2.4%.
South Korea’s Kospi slipped 0.3%, while Australia’s S&P/ASX 200 climbed 0.1%, nearing its all-time high of 8,246.2.
Overnight, U.S. markets also posted gains, with the S&P 500 hitting a new record, rising 0.4% to 5,745.4, driven by gains in Micron Technology. The Nasdaq Composite added 0.6%, and the Dow Jones Industrial Average advanced 0.6%. Positive U.S. economic data, including a fall in weekly jobless claims and steady second-quarter GDP growth of 3%, buoyed investor sentiment.