China has announced its largest economic stimulus package since the pandemic began.
Yahoo Finance’s Jared Blikre analyzes how the stimulus package will affect stocks and commodities around the world.
China’s benchmark stock index, the CSI300 (000300.SS), jumped 4.3 percent, its biggest gain since July 2020, after the People’s Bank of China (PBOC) detailed a monetary stimulus package and stock market support measures on Tuesday.
The country’s currency, the yuan (CNH=X), fell 0.6%, its biggest drop since the Japanese yen’s collapse in early August.
In the U.S., stock prices rose, but the biggest impact was felt in commodities. Silver futures (SI=F) surged more than 4.5% to hit a 10-year high. Copper futures (HG=F) rose for the ninth straight day, extending their winning streak to 10 days, hitting a two-month high.
The stimulus package is the latest attempt to steer China’s economy out of a recession caused by property market instability and deflationary pressures, and includes more than $325 billion in measures primarily through monetary rather than fiscal means.
Chinese stocks continued to rise on Wednesday, with the Shanghai Composite Index (000888.SS) closing up 1.2 percent, but skepticism is growing about whether these measures will be successful in turning around China’s economy.
More details on the impact can be found here.
