Mixed global market performance amid economic reform anticipation in China

Global markets exhibited mixed results last Friday as investors closely watched potential economic reforms in China and anticipated fiscal stimulus from Beijing. The Hang Seng Index in Hong Kong rallied, driven by the expected economic measures to boost the Chinese economy. This optimism also influenced Australia's ASX 200, which managed to recover from earlier losses, with technology stocks making a comeback.

Contrarily, Japan's Nikkei Index saw a decline. The Bank of Japan's decision to retain its current monetary policy, including interest rates and yield control curve policy, failed to inspire confidence among investors. The weakening Yen raised concerns over potential government intervention to bolster the currency, adding pressure to the Nikkei. Further contributing to the gloomy mood were disappointing private sector PMI numbers with both services and manufacturing PMIs seeing a decline in September.

U.S. equity markets struggled last Friday despite a decrease in initial jobless claims. The S&P 500 and Dow recorded losses on Thursday, setting a somber tone for Friday's session. The NASDAQ Composite Index also slipped. This trend continued into Friday with additional losses across the NASDAQ, Dow and S&P 500. This negative sentiment is expected to carry over into Monday's Asian trading session.

The prospect of sustained high-interest rates also challenged market sentiments. Despite a slight rise in manufacturing PMI and the services PMI avoiding contraction, U.S. markets remained under pressure. A potential U.S. government shutdown further exacerbated the risk-averse mood.

On the Australian front, the ASX 200 saw a marginal rise of 0.05%, with tech stocks struggling for the fifth consecutive day. However, mining and banking sectors had mixed sessions. BHP Group Ltd (ASX:NYSE:BHP) and Fortescue Metals Group (OTC:FSUGY) (ASX:FMG) recorded gains while Rio Tinto (ASX:NYSE:RIO) fell. Among banks, National Australia Bank (OTC:NABZY) (ASX:NAB) and Westpac Banking (NYSE:WBK) Corp (ASX:WBC) ended the day up, while ANZ Group (ASX:ANZ) and Commonwealth Bank of Australia (OTC:CMWAY) (ASX:CBA) registered losses.

In Hong Kong, Alibaba (NYSE:BABA) Group Holding Ltd (HKSE:9988) and Tencent Holdings (OTC:TCEHY) Ltd (HKSE:700) significantly contributed to the Hang Seng Index's rally. Bank stocks also had a positive session with China Construction Bank (OTC:CICHF) (HKSE:939) and the Industrial and Commercial Bank of China (HKSE:1398) rising.

Despite the Nikkei's overall decline, Sumitomo Mitsui (NYSE:SMFG) Financial Group (TYO:8316) and Mitsubishi UFJ (NYSE:MUFG) Financial Group (TYO:8306) rose. However, Sony Corp. (TYO:TYO:6758), SoftBank Group Corp. (TYO:TYO:9984), Tokyo Electron Limited (TYO:8035), and Fast Retailing Co (TYO:9983) recorded losses, while KDDI (OTC:KDDIF) Corp (TYO:9433) managed to buck the trend with a gain.

As markets move into a new week, investors will continue to monitor the higher-for-longer interest rate environment and updates from China on economic reform plans.

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