Market Performance Overview

In a notable market shift, Chinese equities reached their highest point of the year, countering a downturn in the US stock market. This movement comes amid optimistic speculations regarding potential policy interventions aimed at revitalizing consumption within China’s economy.

CSI 300 and Hang Seng Indices Rise

On Thursday, the Chinese authorities announced a press conference scheduled for Monday to discuss strategies to “boost consumption,” which served as a catalyst for the CSI 300 benchmark index to increase by 2.4%. Similarly, Hong Kong’s Hang Seng index experienced a rise of 2.5%.

Sector Gains Driven by Consumer Exposure

The surge in Chinese markets was largely driven by stocks with strong ties to the consumer sector. Key highlights include:

• Kweichow Moutai, a leading beverage firm, saw its shares climb by 5.9%.
• Electric vehicle manufacturer BYD experienced a substantial increase of 6.5% in its stock value.
• Contemporary Amperex Technology Co. Ltd (CATL), the largest EV battery producer globally, recorded a 3.5% rise in shares.

Context of Economic Challenges

In recent years, the Chinese economy has faced a slowdown, with consumption levels and inflation remaining persistently low. This trend has led many economists to advocate for stronger governmental measures to stimulate consumer spending and support economic growth.

Global Market Reactions

In contrast, US stocks entered correction territory on Thursday, primarily influenced by President Donald Trump’s recent tariff threats, which have the potential to escalate into a broader global trade conflict.

Currency and Commodity Responses

As a result of these developments:

• The US dollar appreciated by 0.2% against a basket of currencies.
• The Japanese yen weakened by 0.6%, trading at ¥148.66 per dollar.
• Gold prices remained stable, while Brent crude oil prices increased by 0.9%, reaching $70.47 per barrel.