Asia: Chinese stocks lead markets high on stimulus hopes

Asian markets ended the week on an upbeat note, as Chinese stocks were buoyed by the prospect of more stimulus from the People's Bank of China.

Chinese equities notched their second consecutive week of gains for the first time since August, with the Shanghai Composite Index rising 1.60% to extend its weekly advance to 6.5%. China's main benchmark has rallied 14.7% since the lowest point reached amid the recent sell-off on 26 August.

Hong Kong's Hang Seng, which has surged 13% since its late September low, gained 0.78%, bringing its weekly gains to 2.5%.

After a summer that saw concerns over the slowdown of Asia's biggest economy deal a major blow to Chinese stocks, the prospect of further economic stimulus has lured investors back to the markets. Beijing could be forced into action even sooner, should the economic data released next week deliver disappointing results.

"Market attention will turn to China’s third quarter GDP release on Monday," analysts at Barclays said.

"A deeper slowdown in property and manufacturing investment, and sluggish export growth point to a weakening of third quarter GDP growth.

"As such, we look for third quarter GDP growth to slow to 6.5% from 7.0% in Q2 in China."

Japanese stocks were also boosted by hope the country's central bank will also inject stimulus into its own economy, sending the Nikkei 225 up 1.08%, closing in on its highest level in almost a month.

Earlier this month, the Bank of Japan said it would keep its annual asset purchases unchanged, even though the latest economic data painted a gloomy picture for the country, which seems to be entering a second recession. On Friday, BoJ governor Haruhiko Kuroda said the bank's easing was having the intended effect and the "virtuous economic cycle" was working.

He added that the BoJ expects consumer prices to reach 2% as oil price impact fades, with consumer spending rising and domestic demand expected to increase due to positive momentum in corporate and household sectors.

The yen slid 0.06% against the dollar, having reached its strongest level against the greenback since August earlier in the session.

Elsewhere, Australia's S&P/ASX 200 ended the week on the front foot after gaining 0.73%, after the Reserve Bank of Australia warned on risks from China's slowdown and housing markets, but also said that they were relatively contained.

The Australian dollar slid 0.65% against its American counterpart.