HONG KONG — Asian shares fell on Monday, following a record day for US equities, as China’s stimulus package disappointed investor expectations.
China approved one 6 trillion yuan ($839 billion) plan. during a meeting of the state legislature Friday. The long-awaited stimulus measures are aimed at helping local governments refinance their mountain of debt in the latest attempt to boost growth in the world’s second-largest economy.
“It’s not exactly the growth rocket that many had hoped for. While the number is substantial, the stimulus is less about kick-starting economic growth and more about plugging holes in a struggling local government system,” Stephen Innes of SPI Asset Management said in a commentary.
Meanwhile, China’s inflation rose 0.3% year on year in October, the National Bureau of Statistics said on Saturday. This marks a slowdown from the 0.4% increase in September and fell to the lowest level in four months.
The Hang Seng fell 1.4% to 20,439.99, and the Shanghai Composite edged up to gain 0.2% to 3,461.41.
Japan’s benchmark Nikkei 225 fell less than 0.1% to 39,533.32. The Australian S&The P/ASX 200 fell 0.4% to 8,266.20. South Korea’s Kospi fell 1.1% to 2,532.62.
U.S. futures were higher as oil prices fell.
On Friday the S&The P500 rose 0.4% to 5,995.54, its biggest weekly gain since early November 2023, briefly rising above the 6,000 level for the first time. The Dow Jones Industrial Average rose 0.6% to 43,988.99, while the Nasdaq composite rose 0.1% to 19,286.78.
On the bond market, longer-term government bond yields fell.
The yield on the 10-year government bond fell from 4.33% at the end of Thursday to 4.30% on Friday. But it is still well above the level of mid-September, when it was almost 3.60%.
Treasury yields have risen in large part because the US economy has remained much more resilient than feared. The hope is that it can remain solid while the Federal Reserve continues to cut interest rates to keep the labor market going while it is being helped inflation almost fallen to the 2% target.
Part of the increase in interest rates is also due to newly elected President Donald Trump. He talks about tariffs and other policies that economists say could increase inflation and the U.S. government’s national debtalong with the growth of the economy.
Traders have already started adjusting forecasts for the number of rate cuts the Fed will make as a result next year. While lower rates can stimulate the economy, they can also give more fuel to inflation.
In other trades Monday, benchmark U.S. crude lost 4 cents to $70.34 a barrel in electronic trading on the New York Mercantile Exchange.
Brent oil, the international standard, lost 7 cents to $73.94 per barrel.
The dollar rose from 152.62 yen to 153.47 Japanese yen. The euro fell from $1.0723 to $1.0720.
___
AP writer Stan Choe contributed to this report.