Asia shares bounce as China mood turns less bleak

Asian stocks rose on Monday as investors bet the Federal Reserve would stop rising interest rates in the United States, and on optimism that Beijing’s continuous drip of economic stimulus would be enough to at least stabilise the Chinese economy.

Due to a holiday in the United States, trading was light ahead of crucial figures on US services, Chinese trade, and inflation later in the week.

Beijing is also anticipated to take more policy actions, such as loosening home-buying restrictions.

There was relief when struggling property developer Country Garden received creditor consent to prolong payments on an onshore private bond.

Chinese blue chips rose another 1.3%, adding to last week’s 2.2% gain.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.1% after rising 2.3% the previous week. The Nikkei 225 index in Japan increased 0.5% after rising 3.4% the previous week.

Last week, the broader Topix rose 3.7% to its best level in 33 years, aided by data indicating corporations posted record profits in the June quarter.

Nonetheless, the Topix has a price-to-earnings ratio of 14, compared to 23 for the S&P 500 and 29.5 for the Nasdaq.

The S&P 500 and Nasdaq 100 futures were both 0.1% higher. The EUROSTOXX 50 futures increased 0.3%, while the FTSE futures rose 0.4%.

Stocks rose on Friday after a positive August U.S. payrolls report raised prospects for the end of rate hikes.

While the headline job figure exceeded expectations, lower adjustments to the prior two months and a slowing in wage growth indicated a tightening in the labour market.

The unemployment rate increased as more people sought work, resulting in the lowest vacancy-to-unemployed ratio since September 2021.