Investing.com-- Most Asian stocks advanced on Friday as Chinese shares surged to over a two-month high on the central bank’s vow to cut interest, however, gains in other regional markets were capped by concerns over escalating trade tensions.
Major U.S. stock indexes closed sharply lower on Thursday, with the S&P 500 slipping into correction territory, battered by President Donald Trump’s tariff announcements.
Chinese stocks jump on PBoC rate-cut pledge
China’s Shanghai Composite jumped 1.5% on Friday, reaching its highest level since December 31, 2024. The Shanghai Shenzhen CSI 300 index surged 2.2%.
Hong Kong’s Hang Seng index climbed 1.9% as of 03:08 GMT.
In response to mounting economic pressures, China’s central bank, the People’s Bank of China (PBoC), announced plans on Thursday to implement additional monetary tools aimed at stimulating growth.
These measures include potential interest rate cuts and maintaining the stability of the yuan amid a challenging global economic environment.
The central bank plans to utilize the seven-day reverse repo rate as its main policy instrument, reflecting a move towards market-based approaches to liquidity management.
These developments come amid concerns over deflationary pressures, sluggish household demand, and ongoing trade tensions with the U.S.
China’s annual parliamentary meeting “Two Sessions” concluded on March 11, with policymakers setting a 5% GDP growth target for 2024 while pledging pro-business reforms, increased fiscal stimulus, and support for the property sector.
Optimism surrounding the world’s second-largest economy spilled over into other regional markets, contributing to broader gains.
Australia’s S&P/ASX 200 rose 0.4% on Friday, while the Philippines’ PSEi Composite gained 0.5%.
Japan’s Nikkei 225 advanced 0.4% due to a weaker yen, while TOPIX rose 0.5%.
Markets in India were closed for a public holiday.
Investors cautious as Trump trade war heats up
Trump heightened trade tensions on Thursday, warning of a 200% tariff on European alcoholic beverages, including wines and champagnes, if the EU proceeded with its planned 50% tariff on American whiskey.
The EU’s move, set to take effect on April 1, is a response to the U.S.’s recent 25% tariffs on imported steel and aluminum, which came into effect this week.
As tariffs disrupt global supply chains, Asian economies—many of which rely on exports to both the U.S. and Europe—face consequences.
South Korea’s KOSPI was largely unchanged, while Indonesia’s Jakarta Stock Exchange Composite Index slipped 1%.