Global stock markets experienced a surge on Thursday following reports of China's plans to inject billions of dollars into the capital of state-run banks and provide fiscal support for the economy. This move comes in response to the slowdown in China's economy, which has had a significant impact on global trade and growth.
Major European indices saw gains, with Germany's DAX rising by 1.3%, the CAC 40 in Paris up by 1.7%, and London's FTSE 100 increasing by 0.5%. In the U.S., futures for the S&P 500 and the Dow Jones Industrial Average also showed gains.
Reports indicated that the Chinese government intends to inject 1 trillion yuan ($142 billion) into capital injections for lenders. This follows earlier announcements by regulators to increase capital at six large banks. The move aims to address shrinking interest margins and profits in the banking sector.
In addition to financial support for banks, the Chinese government announced cash handouts for the poor ahead of the National Day holidays. These measures are part of a broader strategy to counter a prolonged downturn in the property sector and stimulate consumer spending.
Asian markets responded positively to the news, with Hong Kong's Hang Seng and Shanghai Composite index both posting significant gains. In Japan, the Nikkei 225 advanced by 2.8%, while South Korea's Kospi jumped by 2.9% following positive developments in the semiconductor industry.
Market analysts expressed optimism over China's stimulus efforts, with Asian stocks rebounding despite a slight dip in Wall Street the previous day. Investors are now looking ahead to the upcoming U.S. job market update for further market cues.
Concerns over slowing hiring and inflation have been key factors influencing market sentiment. The Federal Reserve's recent decision to cut interest rates reflects a shift towards prioritizing job market protection over inflation control.
In commodity markets, U.S. crude oil prices fell, while the U.S. dollar strengthened against the Japanese yen and the euro.
