Opportunities in the Asian Stock Market Today: A Practical Guide for 2024

The wisdom of Benjamin Graham remains valid: markets become safer when prices fall and riskier when they rise. From this perspective, the Asian stock market today presents a particularly attractive outlook for those seeking strategic entries. Asian financial markets, especially in China, have experienced significant corrections that could translate into value opportunities for 2024.

The current scenario of Asian markets

The central debate revolves around China’s internal challenges and what actions its government will take. The magnitude of the adjustment is considerable: since the highs of 2021, the three main Chinese stock exchanges have lost approximately 6 trillion dollars in market capitalization.

Performance has been severe during 2021-2024:

• China A50: down 44.01%
• Hang Seng: retreat of 47.13%
• Shenzhen 100: decrease of 51.56%

These numbers reflect the convergence of multiple factors: the legacy of restrictive COVID policies, regulatory pressure on tech companies, structural real estate crisis, weakening international demand, and trade tensions with the United States over high-performance semiconductors.

The Chinese economy has slowed its growth significantly and faces increasingly evident structural challenges. Foreign direct investment contracts, manufacturing shifts toward emerging markets like India, Indonesia, and Vietnam, while China’s demographic pyramid shows accelerated aging and depressed birth rates.

Stimulus measures: Are they sufficient?

In response, the Chinese central bank (PBOC) has implemented reserve requirement ratio cuts of 50 basis points, releasing approximately 1 trillion yuan (139.45 billion dollars) into the system.

However, the most aggressive initiative still under discussion is a rescue package valued at 2 trillion yuan (278.90 billion dollars), financed with offshore funds from state-owned enterprises. This capital would be used for massive stock purchases to counteract widespread selling.

Additionally, the one-year preferential credit rate has gradually decreased since late 2021, currently standing at 3.45%. The Asian region is experiencing deflationary pressures indicating contraction in domestic consumption.

Although these measures are not surprising—anticipated for months—their delay and lack of coordination within a comprehensive strategy generate uncertainty about their effectiveness. China closed 2023 with 5.2% growth, below expectations and far from the dynamism of previous decades.

Geography and hierarchy of Asian financial markets

Asia is the largest and most populous continent on Earth. The shift of the global economic axis toward this region over decades has created unprecedented investment opportunities, albeit unevenly distributed.

China dominates with three of the largest Asian stock exchanges: Shanghai (the largest regional exchange with a market cap of 7.357 trillion dollars), Hong Kong, and Shenzhen. These three markets host over 6,800 companies, though with restrictions for minor foreign investors.

India, the fifth-largest economy worldwide, concentrates its market in the Bombay Stock Exchange, offering exposure to over 5,500 companies.

Tokyo, once the largest Asian stock exchange decades ago, now ranks second with a market cap of 5.586 trillion dollars, displaced by China’s rise.

Among medium-sized developed economies are South Korea, Australia, Taiwan, Singapore, and New Zealand. In the emerging segment operate Indonesia, Thailand, the Philippines, Vietnam, and Malaysia.

Shenzhen has a market cap of 4.934 trillion and Hong Kong 4.567 trillion, consolidating China with a combined total of 16.9 trillion dollars. Other significant Asian markets include India, South Korea, Australia, and Taiwan.

Operating hours: Maximize overlap

For those trading from Europe, the Asian stock market today hours require precision. Operating from Madrid (CET/GMT+1):

• Tokyo (GMT+9): 8-hour difference
• Shanghai, Shenzhen, Hong Kong (GMT+8): 7-hour difference

Optimal overlap occurs between 2:30 a.m. and 8:00 a.m. (Madrid time), when the four main markets are simultaneously open. This window ensures volume and liquidity in stocks and derivatives (futures, CFDs), increasing operational opportunities.

The concept of “Asian overlap” is fundamental: it allows taking advantage of movements with high liquidity without being a permanent night trader.

Structural challenges of the region

The Asia-Pacific region faces four major challenges:

1. Geopolitical instability: The Korean Peninsula, the South China Sea, the Taiwan Strait, and the Indo-China border are potential escalation hotspots. The US role as a security partner varies.

2. Economic slowdown: China, the regional engine, will experience more moderate growth with side effects on trade, investment, and tourism. Post-COVID recovery is still consolidating.

3. Accelerated demographic transition: Aging population, increasing urbanization, and migration pressure social security, environmental resources, and the labor market.

4. Climate change: The region is vulnerable to extreme weather events, biodiversity loss, and food insecurity, responsible for approximately 50% of global emissions.

While the United States maintains hegemony with 58.4% of the global market (2022), the three largest Asian markets—Japan, China, and Australia—account for just 12.2%. Japan held 40% in 1989, a reminder of long-term dynamics.

Specifically in China, state intervention could limit future stock market expansion prospects, although current corrections present latent opportunities.

Technical analysis of main indices

China A50: Persistent downtrend

This index tracks 50 A-shares from Shanghai and Shenzhen, representing larger and more liquid companies. Since all-time highs of 20,603.10 dollars (February 2021), it maintains a downtrend. Currently trading at 11,160.60 dollars, 9.6% below the 50-week exponential moving average (12,232.90 dollars).

To confirm a bullish reversal, a sustained break of the trend and moving average is needed, with RSI surpassing its mid-zone toward overbought. Key levels: support at 8,343.90 dollars (August 2015 lows) and resistance at 15,435.50 dollars (May 2015 highs).

Hang Seng: Depressive consolidation

Tracks companies listed in Hong Kong (more than 80 companies, 65% market cap). Currently at 16,077.25 HK$, below both the downward trend line and the 50-week moving average. RSI again in bearish consolidation. Next resistances at 18,278.80 and 24,988.57 HK$, both distant with no tangible economic changes.

Shenzhen 100: Technical oversold

Measures the performance of the top 100 Shenzhen A-shares. Since highs of 8,234.00 yuan (February 2021), it fell to 3,838.76 yuan, 16.8% below the 50-week moving average. RSI approaching oversold (30), indicating potential technical rebound. Major supports at 2,902.32 yuan (December 2018 lows) and resistance at 4,534.22 yuan (November 2010 highs).

Listed companies: From state-owned to tech

Chinese leading corporations rival Western giants. State Grid, the largest utility company worldwide, generated 530 billion dollars in revenue (2022). Walmart and Amazon led the West with 611 and 514 billion respectively.

Most Chinese leaders operate in traditional sectors (utilities, construction, banking, energy) under state ownership, with restrictions for foreign retail investors.

However, companies like JD.com (156 billion revenue), Alibaba, Tencent, Pinduoduo, Vipshop, and manufacturer BYD operate under more open models. These stocks are accessible via ADRs on Western exchanges.

Alternatively, derivatives like Contracts for Difference allow speculation without owning the underlying asset, tradable on specialized platforms.

Recommendation for 2024

If you want to invest or speculate in the Asian stock market today, the decisive factor will be monitoring announcements on monetary, fiscal, and regulatory stimuli. The current corrections create buying opportunities for the long term, but only if Chinese authorities implement coherent and effective stimulus packages that revive the economy.

The Asian region maintains transformative potential, but 2024 will be a year of policy validation and structural adjustments. Positioning strategically today could result in significant gains when the recovery consolidates.