- Wednesday saw a mixed bag of global stocks following China’s commitment.
- Oil prices increased and U.S. futures were mixed.
- China intends to issue 1 trillion yuan ($139 billion) in government bonds to finance new projects.
Wednesday saw a mixed bag of global stocks following China’s commitment to increase spending to boost its economy.
In London, Tokyo, and Hong Kong, benchmarks increased, while in Paris, Frankfurt, Sydney, and Seoul, they decreased. Oil prices increased and U.S. futures were mixed.
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To encourage faster economic growth, China intends to issue 1 trillion yuan ($139 billion) in government bonds to finance new projects including building. Zhu Zhongming, a vice minister of finance, says the goal is to “further cement the recovery momentum of the Chinese economy” by encouraging more domestic spending.
This decision implies a dedication to bolstering economic expansion and tackling financial difficulties across multiple governmental tiers. Officials did not, however, say that the money would go into China’s troubled real estate market, which has severely hindered growth as developers fight to make large loan repayments while consumer demand has declined.
Chinese stocks saw modest gains on Wednesday, with the Shanghai Composite index rising 0.4% to 2,974.11 and the Hong Kong Stock Exchange rising 0.6% to 17,085.33. Early trading in Europe saw London’s FTSE 100 up 0.1% at 7,384.58, the Paris CAC 40 down 0.5% to 6,864.02, the German DAX down 0.4% to 14,825.07, and the S&P 500 down 0.4%.
South Korea’s Kospi fell 0.9% to 2,363.17 during Asian trading, while Japan’s Nikkei 225 index increased 0.7% to 31,269.92. The SET in Bangkok increased 0.8% while the Sensex in India fell 0.8%.
The yield on 10-year Treasury bonds dropped back this week after rising to 5.02% earlier in the week, providing a small respite for the stock markets, which have been battered by rising U.S. Treasury bond yields.
Excessive yields negatively impact the value of stocks, cryptocurrencies, and other investments, causing the economy to stutter and putting pressure on the entire financial system.
