US and European equity futures inched lower while Asian shares pared some of their earlier gains as investors mulled the sustainability of China’s rally.
Chinese stocks rose as traders continued to bet Beijing’s wide-ranging stimulus package would help drive a market turnaround and kickstart the country’s sluggish economy.
The offshore yuan strengthened past 7 for the first time since May 2023 while the dollar hit an eight-month low. Investors are cautiously optimistic that the policy barrage has put a floor under China’s stock slump, with expectations that more fiscal support will follow.
A slowdown in the world’s second-largest economy had been a major overhang for Asian stocks and a meaningful recovery as a result of the policy support may help drive gains across the region.
The stimulus that helped the regional stock gauge soar to the highest level since February 2022 was the latest positive news for equities and currency markets, already benefiting from the Federal Reserve’s outsized rate cut last week. Emerging Asian currencies also jumped, led by the Malaysian ringgit and Thai baht.
