
Investing.com -- Most Asian stocks rose on Monday, extending last week’s rally as optimism over more Chinese stimulus measures largely offset data showing business activity in the country deteriorated further in July.
Hopes of fewer U.S. interest rate hikes also aided regional markets, after data on Friday showed that the Federal Reserve’s preferred inflation gauge eased in June.
Japanese stocks were the best performers in the region, rebounding sharply from losses on Friday as the Bank of Japan (BOJ) carried out an unscheduled bond-buying operation to help stem a spike in yields.
The Nikkei 225 rose 1.4%, while the broader TOPIX added 1.3%, with both indexes now moving back towards their 30-year peaks. Japanese stocks rose even as data showed that industrial production grew less than expected in June, while large retailers' sales fell.
Chinese markets firmed on Monday as the State Council outlined more measures to boost domestic consumption and economic growth.
The Council unveiled measures aimed chiefly at increasing retail discretionary spending, as well as supporting the real estate and automobile markets.
China’s Shanghai Shenzhen CSI 300 index rose 0.8%, while the Shanghai Composite added 0.6%. Gains in Chinese stocks saw Hong Kong’s Hang Seng index surge 1.6%, as the council also unveiled measures intended to support the country’s biggest tech companies.
But bigger gains were held back by data showing that China’s manufacturing sector shrank for a fourth straight month in July, while broader business activity also deteriorated.
The readings indicated that the Chinese economy was still struggling after a weak third quarter, and that more policy support was needed to boost Asia’s largest economy.
Other China-exposed Asian stocks advanced on Monday, with South Korea’s KOSPI up 0.8%, while most Southeast Asian markets rose.
On the other hand, futures for India’s Nifty 50 index pointed to a weak open, as investors collected profits after a string of record highs through July.
Australia’s ASX 200 index traded sideways on Monday, as investors hunkered down before a Reserve Bank of Australia meeting on Tuesday.
Markets are split over whether the bank will hike rates further. While inflation has recently eased in the country, it still remains well above the RBA’s 2-3% annual target.
Recent data also showed that the labor market remains strong, which could keep inflation sticky in the coming months, inviting more hikes from the central bank.
Begin trading today! Create an account by completing our form
At One Financial Markets we are committed to safeguarding your privacy.
Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.
Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.
Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.
By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.