On October 14, 2024, European stocks are set for a mixed start to the week, following a volatile trading week. Major indexes in the region closed higher on Friday as investors analyzed U.K. growth figures and anticipated a fiscal stimulus announcement from China.
China's Finance Minister Lan Fo'an indicated in a weekend press briefing that the government is considering more debt issuance to bolster the economy, noting that there is a "rather large" space to increase the deficit.
Asian markets displayed mixed performance on Monday, with Chinese stocks experiencing significant volatility as investors reacted to the weekend's announcements. Trading volumes in Asia were subdued due to a holiday in Japan.
In Hong Kong, the Hang Seng index dropped over 2% amid unstable trading conditions, reflecting mixed sentiments regarding China's economic outlook. The Shanghai Shenzhen CSI 300 and Shanghai Composite indices initially gained but later retraced early profits.
The Chinese government announced fiscal stimulus measures, including increased debt issuance and support for provincial governments, though details regarding the scale and timeline of these measures remain unclear, dampening overall enthusiasm.
Analysts from ANZ noted that these measures could significantly increase national debt, raising concerns about the sustainability of fiscal stimulus given China's already high debt levels.
Economic data from China continues to show persistent weakness, with unexpected declines in consumer inflation and a 23-month continuous drop in producer prices.
In other Asian markets, the Australian ASX 200 gained 0.4%, buoyed by expectations of enhanced stimulus in China, while South Korea's KOSPI rose by 0.4%. Indian markets faced a negative opening as futures for the Nifty 50 index struggled to maintain levels near 25,000 points.
Later today, China will release trade data, which is expected to provide further insights into the economic situation.