Asian stocks struggled for momentum on the week’s first day of trading, with China’s continuing economic woes and another attempt on US Presidential hopeful Donald Trump distracting investors.
Holidays in China, Japan and South Korea made for thin trading conditions and moves were modest.
Economic data from China over the weekend disappointed as industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further.
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The Hang Seng Index, however, gained 0.31%, or 53.03 points, to 17,422.12, as poor data often shortens the odds on more stimulus promises from Beijing.
Mainland stock, bond and foreign exchange markets were closed for the mid-autumn festival break and will resume trading on Wednesday.
The top gainer on the Hang Seng was New World Development, which added 2.49%, while the biggest loser, car dealer Zhongsheng Group Holdings, shed 5.21%.
Home builders’ shares were sold as data over the weekend showed China’s new home prices fell 5.3% from a year earlier in August, with supportive measures failing to spur a meaningful recovery.
Elsewhere across the region, in earlier trade, Asian markets fluctuated with Sydney, Taipei, Mumbai, Bangkok and Manila edging up but Singapore and Wellington slipping.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3%, after bouncing 0.8% last week.
Central banks in Japan and the UK meet this week, with both expected to stand pat on rates for now, while a packed data schedule includes US retail sales and industrial production.
Eurostoxx 50 futures added 0.2% and FTSE futures 0.1%. DAX futures also firmed 0.1%.
Bank Of England Rates
As for the Federal Reserve, futures rallied early to push the chance of a half-point cut to 59%, against 30% a week ago. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing.
The market has 114 basis points of easing priced in by Christmas and another 142 basis points for next year.
Just the chance of an aggressive move saw bonds rally broadly, with two-year Treasury yields down at 3.593% having scored the lowest close since September 2022.
The Bank of England is generally expected to leave rates on hold at 5.00% when it meets on Thursday, though markets have priced in a 31% chance of another cut.
The Bank of Japan meets on Friday and is widely expected to hold steady, though it may lay the groundwork for a further tightening in October.
The drop in Treasury yields has boosted the yen against the dollar, which eased to a near nine-month trough at 140.25 yen having slipped 0.9% last week.
The euro was steady at $1.1096, with the prospect of more rate cuts from the European Central Bank keeping a lid on the currency at $1.1200.
Lower bond yields underpinned gold, which stood at $2,582 an ounce and near an all-time peak of $2,588.81.
Oil prices were mixed as nearly a fifth of crude oil production in the Gulf of Mexico remained offline. Brent fell 4 cents to $71.57 a barrel, while US crude firmed 7 cents to $68.72 per barrel.
Key figures
Tokyo – Nikkei 225 <> CLOSED
Hong Kong – Hang Seng Index > UP 0.31% at 17,422.12 (close)
Shanghai – Composite <> CLOSED
London – FTSE 100 > UP 0.01% at 8,273.44 (0933 BST)
New York – Dow > UP 0.72% at 41,393.78 (Friday close)
- Reuters with additional editing by Sean O’Meara
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