Asian markets opened the week with mixed performances on Monday as traders reacted to China’s central bank interest rate cuts aimed at revitalizing the country’s slowing economy. Despite gold hitting a record high amid geopolitical concerns, the optimism from Wall Street’s strong showing on Friday failed to carry over into the new week. Investors are also anticipating the latest corporate earnings reports, which may further influence market sentiment.
The People’s Bank of China announced it had lowered two key interest rates to record lows, as part of efforts to stimulate spending and achieve the government’s annual five percent economic growth target. This move followed recent data showing China’s economy expanded at its slowest rate since early 2023, though the results were still better than expected. Zhang Zhiwei, chief economist at Pinpoint Asset Management, noted that China’s monetary policy has become more supportive since late September, as authorities aim to address high real interest rates.
Despite these measures, Beijing’s broader efforts to revive the economy have produced mixed reactions. While mainland Chinese and Hong Kong stocks saw a strong rally following the rate cuts and other initiatives such as easing home-buying restrictions, some gains have been reversed due to a lack of further detailed plans. Analysts at Moody’s Analytics observed that while the new supports are welcome and may help China reach its five percent growth target, more needs to be done to address deeper structural issues.
Across Asia, market performances were varied, with Hong Kong falling over one percent, Shanghai making slight gains, and mixed outcomes across Tokyo, Singapore, and other major cities. Meanwhile, in Europe, London opened higher, while Paris and Frankfurt dipped. Gold prices surged to an all-time high of $2,732.82, fueled by escalating tensions in the Middle East, while oil prices remained flat after a significant drop last week.
