The slowdown in China’s economy has weighed on trade and global growth, and blasts of stimulus from Beijing have lifted markets this week.
Bloomberg and other reports cited unnamed sources as saying that the Chinese government would spend 1 trillion yuan ($142 billion) on capital injections for lenders. Earlier this week, Li Yunze, head of the National Financial Regulatory Commission, told reporters in Beijing that regulators would increase capital at six large banks, but he gave no dollar amount.
Banks interest margins and profits have shrunk, so “It is necessary to coordinate various channels such as internal and external channels to replenish capital,” Li said at a news conference that showcased a raft of policies aimed at countering a prolonged downturn in the property sector.
Hong Kong’s Hang Seng jumped 4.2% to 19,924.58, and the Shanghai Composite index surged 3.6% to 3,000.95.
Elsewhere in Asia, the Nikkei 225 in Tokyo advanced 2.8% to 38,925.63.
South Korea’s Kospi jumped 2.9%, to 2,671.57 after semiconductor maker SK Hynix launched production of a new memory chip for artificial intelligence. SK Hynix shares jumped 9.4%.
In Australia, the S&P/ASX 200 picked up 1% to 8,203.70.
“Asian stocks shrugged off Wall Street’s stumble and surged ahead on Thursday, riding high on renewed optimism over China’s stimulus push. It seems like China hasn’t run out of kitchen sinks just yet,” Stephen Innes of SPI Asset Management said in a commentary.
Germany’s DAX gained 1.2%, the CAC 40 in Paris was up 1.6% and in London, the FTSE 100 rose 0.2%.
In off-hours trading, U.S. chipmaker Micron jumped 17% after it breezed past Wall Street’s profit and revenue estimates and gave a strong forecast, boosted by “robust AI demand,” the company said.
Oil companies are under pressure again, and crude prices fell for the second day after The Financial Times reported through sources that Saudi Arabia is preparing to abandon its unofficial price target of $100 a barrel for crude as it prepares to increase output. Chevron, Exxon Mobil and ConocoPhillips were all down between 1% and 2% before the bell.
Benchmark U.S. crude fell below $70 per barrel this week and on Thursday, shed $1.81 to hit $67.88 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gave up $1.77 to $71.13 per barrel.
The U.S. dollar fell to 144.27 Japanese yen from 144.76 yen. The euro was trading at $1.1156, up from $1.1133.
The next date on the calendar circled for a potentially big market move is next week’s monthly update on the U.S. job market.
Investors are concerned over slowing hiring now that inflation has eased significantly from its peak two summers ago. The number of layoffs remains relatively low, but U.S. employers are also more hesitant to hire.
The Fed kept its main interest rate at a two-decade high for more than a year in hopes of slowing the U.S. economy enough to stifle inflation. Last week, it swung toward protecting the job market by cutting the federal funds rate by a larger-than-usual half of a percentage point. Critics say it may be moving too late.
On Wednesday, the S&P 500 slipped 0.2% to 5,722.26, a day after setting an all-time high for the 41st time this year.
The Dow Jones Industrial Average dropped 0.7% to 41,914.75 after likewise setting a record the day before. The Nasdaq composite edged up by less than 0.1%, to 18,082.21.
