Asian shares kicked off the week with a rally with investors optimistic ahead of another week of US rates speculation, while a policy boost for China’s ailing property market lifted the mood too.
Mainland China and Hong Kong stocks rose, led by real estate shares, as some major cities relaxed home purchase restrictions over the weekend and as market expectations for more easing measures rose.
Meanwhile, China’s industrial profits fell in March compared to the first two months and slowed gains for the quarter, official data showed on Saturday, raising doubts about the strength of the recovery in the world’s second-biggest economy.
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China’s blue-chip CSI300 index was up 1.11% with, earlier in the session, its financial sector sub-index higher by 1.65%, the consumer staples sector up 1.02%, the real estate index up 6.93% and the healthcare sub-index up 2.74%.
Chinese H-shares – stocks belonging to companies from the Chinese mainland – listed in Hong Kong rose 0.9% to 6,326.49, while the Hang Seng Index was up 0.54%, or 95.76 points, to 17,746.91. Hong Kong’s Hang Seng Mainland Properties Index jumped 4.3%.
The Shanghai Composite Index rose 0.79%, or 24.41 points, to 3,113.04, while the Shenzhen Composite Index on China’s second exchange rallied 2.31%, or 39.95 points, to 1,768.44.
Japan’s markets were closed but the yen jumped sharply against its peers after it slid past 160 per dollar earlier in the session, leading to speculation that Tokyo could have intervened in the currency market while the country was out for a holiday.
The Japanese currency strengthened about 2% from the initial 159 per dollar level in a matter of a few minutes during Asia hours, as some traders said selling of dollars was seen onshore.
The rapid move came just a few hours after the yen tumbled to the weaker side of 160 per dollar for the first time in 34-years. It also surged more than 1% against other major currencies such as the euro, sterling and the Australian dollar.
Elsewhere across the region, in earlier trade, Indian stocks advanced with Mumbai’s signature Nifty 50 index up 0.85%, or 189.80 points, at 22,609.75.
Eyes on US Fed Meeting
The upbeat sentiment in equities looked set to continue into Europe, with Eurostoxx 50 futures up 0.36% while FTSE futures added 0.52%. Nasdaq futures rose 0.4%, while S&P 500 futures gained 0.28%.
The Fed’s two-day monetary policy meeting, beginning on Tuesday, will take centre stage this week, when expectations are for the central bank to keep rates on hold.
Focus, however, will be on any guidance for the central bank’s rate outlook, after repeated runs of stronger-than-expected US economic data and still-sticky inflationary pressures derailed market bets on how soon the Fed could commence its rate-easing cycle.
Market pricing shows a first Fed rate cut is expected in September, from a June start only a few weeks ago, with just over 30 basis points worth of easing expected this year.
The prospect that US rates would remain in restrictive territory for longer have propped up the greenback, though it was broadly on the back foot on Monday.
Against the dollar, the euro rose 0.34% to $1.0729, while sterling gained 0.38% to $1.2542 The dollar index fell 0.34% to 105.60, though was headed for a monthly gain of 1%.
In commodities, Brent fell 0.9% to $88.70 a barrel, while US crude similarly edged 0.8% lower to $83.17 per barrel, as news of a potential Gaza ceasefire also eased fears of supply constraints.
Key figures
Tokyo – Nikkei 225 <> CLOSED
Hong Kong – Hang Seng Index > UP 0.54% at 17,746.91 (close)
Shanghai – Composite > UP 0.79% at 3,113.04 (close)
London – FTSE 100 > UP 0.49% at 8,179.83 (0843 BST)
New York – Dow > UP 0.40% at 38,239.66 (Friday close)
- Reuters with additional editing by Sean O’Meara
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