Asia report: Stocks rise on China's fiscal plans, PMI data
By Benjamin Chiou
Date: Wednesday 05 Mar 2025
(Sharecast News) - Asian stocks rebounded on Wednesday as investors digested the impact of newly announced tariffs between the US and is trade partners and hopes for new stimulus measures from the Chinese government.
The Nikkei 225 rose 0.2%, the SSE gained 0.5%, the Sensex jumped 1% while the Hang Seng surged 2.8%.
The first day of China's 14th National People's Congress revealed a GDP growth target of around 5% for 2025 and a host of fiscal support measures including a much wider budget deficit, as it attempts to counteract the impact of Donald Trump's punitive duties on Chinese imports.
The government outlined plans to boost inflation to 2.0%, from 0.2% last year, by "vigorously boosting consumption", according to premier Li Qiang.
Also helping sentiment on Wednesday was the news that growth in China's services sector picked up in February. The Caixin/S&P Global services purchasing managers' index rose to 51.4 from 51.0 in January, coming in above the 50.0 mark that separates contraction from expansion for 26 months in a row. It was above analysts' expectations for a reading of 50.8.
The survey found that February's expansion was driven by a combination of higher sales, the start-up of new projects and promotional work. Firms reported an improvement in general market demand and heightened success in converting this into actual new contract wins. Foreign sales also rose since January, with growth of new export business solid and its highest in three months.
"There's been a rise in new business and an increase in sales overseas, adding to hopes that the Chinese economy may be able to withstand punishing US tariffs in a bit more of a resilient fashion," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Tech stocks were performing well, including Tencent, Alilbaba, Meituan and JD.com after the Chinese government said that technology would still be centre to its economic plans, despite an "increasingly complex and severe external environment" for the industry.
"China will strive to create an enabling environment for innovation that encourages exploration and tolerates failure," premier Li's report said.
Hong Kong-listed CK Hutchison jumped 22% after announcing plans to sell stakes in 45 ports, including two terminals in the Panama Canal, to BlackRock and Terminal Investment Limited in a deal worth $22.8bn.
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