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Asian stock markets advanced on Monday, with Japanese equities leading the gains, as robust U.S. payroll data eased concerns about an economic slowdown. Hopes for additional stimulus measures in China also bolstered investor sentiment.
Stocks in the region took positive cues from a strong rally on Wall Street last Friday, which followed a much stronger-than-expected U.S. nonfarm payroll report. The data alleviated worries about a potential U.S. recession, though it tempered expectations for sharp interest rate cuts in the near future.
U.S. stock index futures saw modest gains during Asian trading hours.
Trading volumes across Asia were somewhat subdued due to China’s Golden Week holiday, but Chinese markets are expected to surge when trading resumes on Tuesday, driven by continued optimism over potential stimulus measures from the government.
Japanese Stocks Lead as Yen Weakens
Japan’s Nikkei 225 and TOPIX indices were the top performers in the region, both climbing between 1.8% and 2%. These gains were partly supported by the weakening yen, as doubts grew over the Bank of Japan’s ability to raise interest rates further.
Among individual stocks, 7-Eleven parent company Seven & i Holdings Co., Ltd. jumped over 3% after reports suggested the firm might sell a stake in its supermarket unit ahead of a potential listing. Additionally, Canadian company Alimentation Couche-Tard Inc., with support from Quebec’s public pension fund, was reportedly preparing a takeover bid after Seven & i rejected an earlier offer.
Hong Kong Gains as Investors Eye China Stimulus
Hong Kong’s Hang Seng Index added 0.6%, extending its recent upward trend as hopes for more economic support from China drew investors back to undervalued mainland stocks.
Chinese markets are set to reopen on Tuesday following the Golden Week holiday and are expected to post strong gains. China’s top economic planning body is scheduled to hold a briefing on Tuesday, where it is anticipated to outline additional stimulus measures, building on a series of policies introduced in late September.
These earlier measures helped the Shanghai Shenzhen CSI 300 and the Shanghai Composite indices recover from nearly eight-month lows.
Broader Asian Markets Rise on China Optimism
Positive sentiment around China’s economy helped lift broader Asian markets. South Korea’s KOSPI rose 0.8%, while Australia’s ASX 200 gained 0.5%.
In India, futures for the Nifty 50 pointed to a muted opening after the index recently pulled back from record highs set in September.
Looking ahead, investors will be closely watching a series of speeches from U.S. Federal Reserve officials this week, as well as key U.S. inflation data. Market participants have started to scale back expectations of another 50 basis point rate cut by the Federal Reserve in November, according to data from CME’s FedWatch tool.
