Chinese Stocks Soar Amid Massive Stimulus as Global Markets React

Chinese stocks are experiencing their best week since 2008 due to Beijing's large stimulus package, driving Asian shares to significant highs. Additionally, falling oil prices contribute to global disinflation. The yen dropped to three-week lows, and significant moves in commodities and foreign exchange markets were observed.

Chinese stocks are seeing their best week since 2008, driven by Beijing's massive stimulus package, which has propelled Asian shares to their highest level in 2-1/2 years. This boost in shares comes at a time when a sharp decline in oil prices is expected to aid global disinflation efforts.

The yen dropped to three-week lows ahead of a leadership contest within Japan's ruling Liberal Democratic Party. Investors are closely watching to see how the outcome could impact the country's monetary policy. Meanwhile, the U.S. awaits the release of the core personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge.

MSCI's broadest index of Asia-Pacific shares outside Japan surged 1.1%, hitting its highest point since February 2022. China's blue chips soared by 2.9%, marking a 14% rise for the week, the strongest since November 2008, while Hong Kong's Hang Seng index gained 2.7%, up 12% for the week.

(With inputs from agencies.)