The stock markets in South Korea and Australia went up, while those in Japan showed mixed results due to the yen gaining strength against the dollar in the last two sessions. On Tuesday, the Golden Dragon index of US-listed Chinese companies surged 9.1% in New York trading.

This positive movement follows a significant increase in mainland Chinese equities after China announced a comprehensive stimulus package to support the economy and financial markets.

Asian shares have been on the rise for five consecutive days, driven by Beijing’s support measures. Meanwhile, US stocks reached new highs as investors brace for further rate cuts.

“Within Chinese equities, we anticipate near-term support on the stimulus news, contingent on evidence of effective execution,” said Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management. 

“We expect rate cuts and capital market support to benefit state-owned enterprises concentrated in high-dividend sectors, including utilities, telecoms, energy firms, and financials.”

The effects of the Chinese stimulus measures have extended across Asia, with the regional gauge reaching its highest level since February 2022. 

Australia’s dollar also saw gains, reaching its highest value in 19 months against the US dollar ahead of its monthly inflation readings. Additionally, the offshore yuan rose past 7 for the first time since May 2023.

The Chinese government’s support measures, announced on Tuesday, included interest rate cuts, increased cash for banks, greater incentives for home purchases, and plans to consider a stock stabilization fund. 

However, considering the scale of the economic challenges, these efforts may only provide temporary relief.

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