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Most Asian stocks saw gains on Monday as investors awaited potential fiscal support announcements from China’s top policymakers. However, the rise was cautious, with investors also bracing for the U.S. Federal Reserve meeting and the upcoming U.S. presidential election.
Key Developments:
- Low Trading Volumes: Market activity was subdued due to a holiday in Japan, with the Nikkei 225 futures down 0.2%.
- U.S. Jobs Data Boosts Rate Cut Hopes: A softer-than-expected U.S. nonfarm payrolls report last Friday increased bets that the Federal Reserve might consider more rate cuts, steadying U.S. stock trading in the Asian session.
Chinese Stocks Up on Fiscal Stimulus Expectations
Chinese markets reacted positively as the National People’s Congress (NPC) Standing Committee began a four-day meeting. Investors anticipate the committee might approve an additional $1.4 trillion in new debt to bolster economic growth amidst challenges like deflation and the property market downturn. Both Shanghai Shenzhen CSI 300 and Shanghai Composite indices saw gains of 0.5% and 0.3%, respectively, while Hong Kong’s Hang Seng index rose 0.7%.
Australia’s ASX 200 Edges Higher, RBA in Focus
Australia’s ASX 200 gained 0.3%, driven by anticipation of Tuesday’s Reserve Bank of Australia (RBA) meeting. While rates are expected to remain unchanged, the RBA might lean towards a hawkish stance due to persistent inflation. ANZ forecasts rate cuts may not occur until early 2025.
Mixed Sentiment Across Broader Asian Markets
In South Korea, the KOSPI surged 1.4%, led by gains in the semiconductor sector, while India’s Nifty 50 futures indicated a flat open amid a series of key earnings reports due later this week. Recent polls indicating a close U.S. presidential race between Donald Trump and Kamala Harris have added to market caution, especially with Trump’s tariff stance on China posing potential trade risks for the region.
Overall, the focus this week remains on the NPC meeting outcomes, U.S. Fed decisions, and election results, as investors assess the potential impacts on both regional and global markets.
