Asian stock markets generally experienced gains following announcements from China’s central bank aimed at bolstering the country’s stock market. This initiative includes share repurchases facilitated by corporations and major shareholders.

Recent reports indicated a further slowdown in the Chinese economy during the third quarter, raising the anticipation that the government will enhance its stimulus measures. The world’s second-largest economy recorded a 4.6% annual growth in the July to September period, a slight decrease from the 4.7% growth observed in the previous quarter.

Year-to-date, growth has averaged 4.8%, falling short of the official target of approximately 5%. Persistent issues in the property sector have continued to negatively impact demand across the economy.

In response, the People’s Bank of China released guidelines directing state banks to extend loans for stock repurchases to both companies and major stakeholders. This measure is aimed explicitly at stabilizing China’s floundering stock markets, which have struggled in recent years. These loans can only be granted by 21 specified financial institutions, with an upper limit on interest rates set at 2.25%, as highlighted in a recent press release from the central bank.

This announcement drove a notable rally in the Shanghai Composite index, which was up by 2.1%, reaching a total of 3,232.14. Similarly, the benchmark index for the smaller Shenzhen market surged by 3.2%. Over the last three months, Shanghai’s benchmark has increased by 9%, although it had spiked even higher the month prior, thanks to the introduction of new measures aimed at counteracting economic slowdown, before declining as investors expressed disappointment over the absence of substantial government spending initiatives.

In Hong Kong, the Hang Seng index appreciated by 2.2%, closing at 20,519.78. Additional developments on the same day indicated that China’s large state-run banks lowered their deposit rates, reducing the rate for demand deposits from 0.15% to 0.1% and for longer-term deposits from 1.35% to 1.1%.

In the broader Asian context, Japan’s Nikkei 225 grew by 0.2%, indexing at 38,798.48, while Seoul’s Kospi dipped by 0.6%, landing at 2,594.40. Australia’s S&P/ASX 200 observed a 0.9% decline, settling at 8,283.20. Conversely, Taiwan’s Taiex experienced a healthy 1.9% increase, and Bangkok’s SET index rose by 0.2%. However, India’s Sensex decreased by 0.2%.

On the U.S. front, stocks wandered around record levels following the latest indicators that the U.S. economy remains robust. The S&P 500 closed almost unchanged at 5,841.47 after experiencing fluctuations around its all-time high throughout the trading day. The Dow Jones Industrial Average saw a modest gain of 0.4%, reaching a new record of 43,239.05, while the Nasdaq composite edged up by less than 0.1%, achieving a total of 18,373.61.

In the tech sector, Nvidia and several other companies within the semiconductor industry flourished after Taiwan Semiconductor Manufacturing Co. surpassed analyst expectations for its latest quarterly earnings. However, negative movements were seen in Alphabet, Google’s parent company, which experienced a 1.4% drop, and Elevance Health, which plunged by 10.6% after reporting lower-than-expected quarterly earnings. Additionally, CSX witnessed a significant fall of 6.7% due to not meeting analyst profit estimations for the last quarter and projecting only slight volume growth for the remainder of the year, largely as the Southeast recovers from two significant hurricanes.

The bond market reacted with a rise in Treasury yields, propelled by optimistic reports regarding the U.S. economy. Retail sales in the U.S. for September exceeded August’s figures, along with more encouraging underlying growth trends within the data that surpassed economists’ forecasts. Concurrently, a report indicated a decrease in unemployment benefits claims, suggesting that nationwide layoffs remain relatively low and are not adversely affecting the job market.

This data strengthens the narrative that the economy could potentially avoid recession amid the worst inflation rates seen in generations. There is growing optimism that the Federal Reserve’s decision to cut interest rates further propels stock prices upward, although some critics caution that stock valuations appear inflated compared to corporate profit growth rates.

In Europe, the European Central Bank also lowered its main interest rate by a quarter percentage point on Thursday, which led to increases of 1.2% in French stock indexes and 0.8% in German stock indexes. As trading continued early on Friday, U.S. benchmark crude oil prices increased by 25 cents to $70.92 per barrel, with Brent crude also showing a rise of 20 cents to reach $74.65.

The U.S. dollar depreciated against the Japanese yen, settling at 149.85 yen from 150.21. In contrast, the euro saw a slight gain, rising to $1.0843 from $1.0827.