Asian stocks muted as China stimulus measures in focus

Focus this week is squarely on the NPC meeting, where Beijing is widely expected to outline plans for more fiscal spending to support the economy

Most Asian stocks moved in a flat-to-low range on Thursday as a rally on the back of Donald Trump winning the 2024 U.S. election cooled, with focus turning to more stimulus measures in China and an upcoming Fed meeting.

While most Asian markets rose sharply on Wednesday, Chinese stocks lagged on the prospect of stricter trade tariffs against the country.

A meeting of China’s National People’s Congress, which began earlier this week, is now in focus for more cues on fiscal stimulus.

Asian markets took limited positive cues from a strong overnight session on Wall Street, as U.S. benchmark indexes rose to record highs after Trump’s victory.

U.S. stock index futures steadied in Asian trade, with investors looking to the conclusion of a Fed meeting later on Thursday for more cues on interest rates.

The Federal Reserve is widely expected to cut interest rates by 25 bps. But its outlook on rates remains uncertain in the face of a Trump presidency and recent stickiness in inflation.

Shanghai Shenzhen CSI 300 and Shanghai Composite indexes gained 0.4% each, while Hong Kong’s Hang Seng index advanced almost 1%, recovering from mild losses made on Wednesday.

Chinese markets were resilient despite the implications of a Trump presidency, given that Trump has vowed to impose a 60% trade tariff on all Chinese imports.

Focus this week is squarely on the NPC meeting, where Beijing is widely expected to outline plans for more fiscal spending to support the economy. An announcement is expected to be made at the conclusion of the meeting on Friday.

Before that, Chinese trade data is due later on Thursday.

Nikkei 225 index declined 0.3% after surging 2.6% in the prior session. The TOPIX index gained 0.8% on Thursday, with sentiment towards Japanese stocks remaining generally upbeat on a sharp decline in the yen on Wednesday.

The yen was impacted by a stronger dollar, with the Japanese currency reaching its lowest level in three months as the dollar rose. Markets expect a wide interest rate differential between Japan and the U.S. to persist under a Trump presidency.

Weakness in the yen helped export-oriented stocks gain, with automaking giant Toyota Motor soaring more than 4% even as it clocked underwhelming earnings for the September quarter.

Wider Asian markets moved in a flat-to-low range.

ASX 200 declined 0.2% as data showed the country’s trade balance hit its weakest level in four years in September, amid weak commodity demand in top trading partner China.