Hong Kong – Asian markets experienced a tumultuous start to the week, characterized by significant shifts in stock prices in various countries. Tokyo’s Nikkei 225 index faced a substantial drop of nearly 5%, while the Chinese markets saw a remarkable surge following the announcement of new stimulus measures to support the struggling economy. Notably, the Shanghai index soared by over 7% in response to this news.

The sharp decline in Japanese shares was mainly attributed to the selection of former Defense Minister Shigeru Ishiba as the successor to Prime Minister Fumio Kishida. Ishiba’s expressed support for raising interest rates and potentially increasing corporate taxes led to concerns among investors, resulting in the Nikkei closing 4.8% lower by the end of Monday’s trading session.

Exporters such as Toyota Motor Corp., Honda Motor Co., and Nissan Motor Co. experienced notable declines as the stronger yen presented a disadvantage for companies reliant on overseas sales. Meanwhile, in Hong Kong, the Hang Seng index recorded a significant 3.4% jump, aligning with positive momentum in Chinese markets ahead of the country’s upcoming week-long national holiday celebrating 75 years of communist rule.

China’s commitment to supporting the property industry and revitalizing financial markets through announced measures contributed to the positive market sentiment. Additionally, with the economy showing signs of further slowdown, efforts to stimulate housing market growth were underscored by recent data indicating a fifth consecutive month of contraction in manufacturing activity.

Across Asia, Australia’s S&P/ASX 200 advanced, while South Korea’s Kospi faced a decline. In the US, the S&P 500 and Dow Jones Industrial Average saw mixed results, with Treasury yields easing in response to reports of slowing inflation. The Federal Reserve’s efforts to adjust interest rates to support economic conditions and employment stability were highlighted in the context of ongoing economic uncertainties.

Market volatility persisted as oil prices rose following escalated tensions in the Middle East, with Israel launching an airstrike in Lebanon and benchmark crude oil prices increasing. Amidst these developments, the euro also experienced fluctuations in trading value. The intricate interplay of geopolitical events, economic indicators, and policy decisions underscored the complex landscape shaping global financial markets.