A currency trader walks by the screens showing the foreign exchange rates at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Oct. 25, 2023. Asian shares advanced Wednesday, tracking gains on Wall Street after Verizon and other big companies reported fatter profits for the summer than expected. (AP Photo/Lee Jin-man)
World shares were mixed Wednesday after China pledged more spending to energize its economy.
Benchmarks fell in Paris, Frankfurt, Sydney and Seoul but rose in London, Tokyo and Hong Kong. U.S. futures were mixed and oil prices turned higher.
China plans to issue 1 trillion yuan ($139 billion) in government bonds to finance new construction and other projects as part of an effort to spur faster economy growth.
The aim is to drive more domestic spending and “further cement the recovery momentum of the Chinese economy,” the official Xinhua News Agency quoted Zhu Zhongming, a vice minister of finance as saying.
“This decision suggests a commitment to supporting economic growth and addressing fiscal challenges at various levels of government. It also hints at a potential future shift in China’s fiscal approach,” Stephen Innes of SPI Asset Management said in a commentary.
Chinese shares logged moderate gains on Wednesday, with Hong Kong’s Hang Seng rising 0.6% to 17,085.33. The Shanghai Composite index added 0.4% to 2,974.11.
In early European trading, Germany’s DAX fell 0.4% to 14,825.07 and the CAC 40 in Paris lost 0.5% to 6,864.02. London’s FTSE 100 was up 0.1% at 7,384.58.
Average edged 0.1% higher. On Tuesday, the S&P 500 climbed 0.7% and the Dow gained 0.6%. The Nasdaq composite rose 0.9%.
In Asian trading Wednesday, Japan’s Nikkei 225 index gained 0.7% to 31,269.92.
South Korea’s Kospi slipped 0.9% to 2,363.17, while the S&P/ASX 200 in Sydney lost 2.6 points to 6,834.39. India’s Sensex dropped 0.8% and the SET in Bangkok was up 0.8%.
Stock markets have slumped under the weigh of higher U.S. Treasury bond yields, though they’ve gotten a slight reprieve this week as the yield for the 10-year Treasury fell back after climbing to 5.02% earlier this week. Early Wednesday, the 10-year yield was at 4.87%.
High yields hurt prices for stocks, cryptocurrencies and other investments. They also slow the economy bluntly and are a strain for the entire financial system.
