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Asian markets shrug off lower Chinese growth targets

China’s decision on Thursday to set a more modest growth target for this year did little to derail a broader rebound across Asian stock markets led by a brief double‑digit surge in South Korea’s Kospi. Major US indices closed in positive territory on Wednesday supported by an improving US services survey. Bitcoin extended its recent gains after US political backing for crypto firms, while European stocks rallied. Gold was largely stable on Thursday, with gains capped due to higher yields on US Treasuries and a slightly stronger US Dollar Index.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

China Shanghai
© Shutterstock

China set its annual economic growth target for 2026 at 4.5% to 5% on Thursday, the lowest goal since the early 1990s, as policymakers contend with entrenched deflationary pressures, a prolonged property downturn and trade frictions with the US. Beijing kept its budget deficit goal unchanged at around 4% of gross domestic product (GDP) and maintained its consumer inflation target at about 2%, while also aiming to hold the urban unemployment rate near 5.5% and create 12 million new urban jobs. The government plans sizeable but measured fiscal support, including 1.3 trillion yuan in ultra-long-term special treasury bonds and 4.4 trillion yuan in local government special-purpose bonds. The more conservative policy mix comes after the economy expanded 5% last year despite flat consumer prices, falling producer prices and the first annual decline in fixed-asset investment in decades, while authorities also seek to manage the impact of US tariff measures and geopolitical risks ahead of US President Donald Trump’s planned visit to China later this month.

South Korea stocks rebound after steep sell-off

Moves in Chinese equities were modest following the announcement of the economic targets: Mainland China’s CSI 300 was 0.7% higher, while Hong Kong’s Hang Seng Index was essentially flat. South Korea’s Kospi index rebounded sharply on Thursday, jumping 9.6%, following a 12% plunge the previous day. The recovery was driven largely by a reversal of forced selling linked to margin calls among retail investors rather than any change in fundamentals, with heavyweight chipmakers Samsung Electronics and SK Hynix each surging more than 14%. Japan’s Nikkei 225 was trading 1.7% higher, Australia’s S&P/ASX 200 was up 0.4%, and India’s Nifty 50 was trading 0.4% above its previous close.

US equities recover on service data

US stock indices recovered on Wednesday, supported by stronger-than-expected sentiment in the US services sector in February and easing oil prices following recent spikes linked to the Iran war. The Dow Jones Industrial rose 0.5% after the previous day’s losses, while the broad S&P 500 gained 0.8% and the technology-heavy Nasdaq 100 advanced 1.5%. The Institute for Supply Management’s (ISM) services index, which measures business activity, new orders and employment in services, improved contrary to expectations and its prices-paid component fell to its lowest level in almost a year, signalling reduced cost pressures even as hostilities between Iran, Israel and Gulf states continued. Among individual stocks, cryptocurrency platform Coinbase climbed 14.6% on a sharp midweek rise in Bitcoin after President Trump backed crypto companies in their dispute with US banks over paying yield on stablecoins. Bitcoin was trading 5.6% higher near USD 72,400 on Thursday.

US private hiring remains narrow

US private employers added 63,000 jobs in February, according to the ADP report released on Wednesday, up from a revised 11,000 in January and ahead of market expectations, but job creation was heavily concentrated in education and health services with 58,000 positions and construction with 19,000. Other major sectors such as professional and business services, manufacturing and trade, transportation and utilities shed 30,000, 5,000 and 1000 jobs respectively, underlining the lack of broad-based labour market strength despite low layoff levels.

Swiss inflation steady at 0.1% in February

Swiss consumer prices rose 0.6% in February versus January, leaving annual inflation unchanged at 0.1%, according to data published on Wednesday that came in at the top end of market expectations. Price pressure remained significantly stronger for domestic goods, where consumer prices were 0.6% higher than a year earlier, while prices for imported goods were 1.6% lower than in the previous February. The Federal Statistical Office noted that the monthly increase was driven mainly by higher rents, air fares and tourism-related services. the Swiss Market Index gained 0.9% on Wednesday.

Euro-area unemployment edges lower

Eurostat reported on Wednesday that euro-area unemployment fell to 6.1% in January from 6.2% in December and 6.3% a year earlier. The number of unemployed people declined to an estimated 10.770 million, representing a monthly decrease of 184,000. European stocks were higher on Wednesday: The Euro Stoxx 50 advanced 1.8%, Germany’s DAX added 1.7% and France’s CAC 40 increased 0.8%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Costco, Deutsche Post, and Reckitt.

Economic data in focus: Swiss unemployment rate (09:00), euro-area retail sales (11:00), European Central Bank monetary policy meeting minutes (13:30), US trade balance (13:30), US weekly initial jobless claims (14:30), European Central Bank President Christine Lagarde speaks (18:00).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.