• China's Finance Minister Lan Foan's vague pledge to increase debt as part of an economic stimulus package has stirred global market uncertainty.
• The lack of specifics has led to a mixed response in Asian stock markets, with onshore and offshore investors diverging in their sentiment.
• Despite the uncertainty, property stocks made gains and Goldman Sachs raised their GDP forecast for China, but oil prices slid due to worries about waning Chinese demand.
• The uncertainty also impacted currency markets, with the yuan slipping and the U.S. dollar drawing support from reduced bets of a Federal Reserve interest rate cut.

In a recent development that has left investors in a state of uncertainty, China's Finance Minister Lan Foan pledged to significantly increase debt as part of a broad economic stimulus package. However, the lack of specifics regarding the overall size of the stimulus has left investors guessing, leading to a mixed response in the Asian stock markets.

The announcement was made at a closely watched news conference on Saturday, where Lan Foan made the commitment to increase debt but did not provide concrete figures.

This lack of detail has led to a divergence in investor sentiment, particularly between onshore and offshore investors. Analysts at Morgan Stanley noted that onshore investors believe Beijing's decision to restructure local government and housing debt using central government funds is more significant than many foreign investors believe.

This divergence was apparent on Monday, with shares in Hong Kong opening lower and experiencing choppy trade in the early hours. This contrasted sharply with mainland Chinese stocks, which got off to a strong start.

Impact on Property Stocks and Global Commodity Markets

Despite the overall uncertainty, property stocks both onshore and offshore eked out solid gains as investors bet that the latest stimulus measures could aid China's beleaguered property sector. The Hang Seng Mainland Properties Index advanced 1.37%, while the CSI300 Real Estate Index jumped 4.1%. The uncertainty surrounding China's stimulus pledges also had an impact on the global commodity markets.

Oil prices slid on Monday due to worries about waning Chinese demand for the commodity. Brent crude futures were last down 1.2% at $78.09 a barrel, while U.S. West Texas Intermediate crude futures fell 1.22% to $74.64 per barrel.

Despite the lack of specifics, the latest raft of stimulus pledges prompted analysts at Goldman Sachs to raise their real gross domestic product forecast for China this year to 4.9% from 4.7%. However, they noted that their structural view on China's growth has not changed, citing the '3D' challenges - deteriorating demographics, a multi-year debt deleveraging trend, and the global supply chain de-risking push - as factors unlikely to be reversed by the latest round of policy easing.

Currency Markets and Inflation Concerns

The uncertainty surrounding China's stimulus measures also had an impact on the currency markets. Reflecting lingering concerns over the Chinese economy, the onshore yuan slipped 0.12% to 7.0750 per U.S. dollar, while its offshore counterpart fell 0.18% to 7.0830 per dollar. The U.S. dollar, on the other hand, continued to draw support from reduced bets of an outsized Federal Reserve interest rate cut next month.

Against a basket of currencies, the greenback hovered near a seven-week high at 103.02. Traders have priced out any chance of a 50-basis-point rate cut from the Fed in November after data last week showed consumer prices rose slightly more than expected in September and recent economic releases have also underscored strength in the labour market.

In a blow to China's growth outlook, consumer inflation unexpectedly eased in September while producer price deflation deepened, data on Sunday showed. This further added to the concerns over the Chinese economy and its impact on global markets.