Stocks in Hong Kong and Shanghai rose sharply on Tuesday after China promised to make it easier for people and businesses to borrow money. This is part of a new plan to help revive China’s struggling economy. President Xi Jinping and other leaders said they would use a more relaxed approach to money management, which raised hopes for lower interest rates.
This announcement is significant because it marks the first major change in China’s economic policy in over ten years. The news also comes at a time when there are worries about President-elect Donald Trump’s tough trade policies, which could create more tension between China and the United States.
In recent years, China’s economy has faced many challenges, including weak consumer spending and problems in the property market. Leaders have been trying to kickstart growth while cautiously managing the economy. Shehzad Qazi, from a consulting firm, pointed out that China is focusing more on its financial strategies for 2025 now that they are preparing for possible tariffs from Trump.
Hong Kong’s stock market jumped more than 3% at the start of trading on Tuesday, building on a nearly 3% increase the day before. The Shanghai stock market, which finished before the news was out, rose over 2% in early trading on Tuesday.
However, some experts cautioned that past government announcements have often fallen short of expectations. They believe that for the new monetary policies to work, trust in businesses and households must be restored.
Meanwhile, in South Korea, the stock market bounced back by more than 2% after President Yoon Suk Yeol temporarily declared martial law on December 3. Although he quickly withdrew the order, it had already caused panic in an economy that’s been struggling with its own issues, especially with Trump promising to return to strict trade measures.
Yoon narrowly avoided being removed from office during a vote in parliament, but he faces multiple investigations into his actions. The South Korean won improved slightly against the dollar but remains weak due to ongoing uncertainty.
Most other Asian markets had mixed results, with Japan, Singapore, and Manila showing gains, while Sydney, Taipei, Wellington, and Jakarta experienced declines. The overall mood was cautious, as investors awaited important inflation data from the US later this week.
Key Market Updates:
– Hong Kong’s Hang Seng Index: Up 1.4% at 20,692.44
– Shanghai Composite: Up 1.5% at 3,492.45
– Seoul’s Kospi: Up 2.4% at 2,416.00
– Tokyo’s Nikkei 225: Up 0.1% at 39,197.42
