Asia’s major stock indexes began the week on the front foot with investor mood lifted by more promises of support from Beijing for its stumbling recovery and by hopes the US Fed may, finally, be ready to end its rate hikes campaign.
That optimism saw mainland China stocks jump, while Hong Kong’s Hang Seng enjoyed a post-typhoon boost.
All China’s four tier-1 cities loosened the definition of “first-time homebuyer” to ease mortgage credit for qualified individuals. Top banks paved the way for further cuts in lending rates and sources said Beijing was planning further action including relaxing home-purchase restrictions.
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“They send a clear signal that policymakers want to stabilise the property market, boost growth and lift sentiment,” said Goldman Sachs in a note. “We suspect more piecemeal measures will continue to be introduced until policymakers are satisfied with the result.”
China’s central government also approved setting up a special bureau within the National Development and Reform Commission (NDRC) to promote the development and growth of the private economy, the NDRC said on Monday.
Foreign investors, after a record monthly net selling in August, had bought a net 6.3 billion yuan ($867.30 million) of Chinese shares via the Stock Connect so far on Monday.
The Shanghai Composite Index rose 1.40%, or 43.81 points, to 3,177.06, while the Shenzhen Composite Index on China’s second exchange rallied 1.44%, or 28.05 points, to 1,981.63.
In Hong Kong, tech giants added 2.5% and mainland property developers surged 9.1%. Country Garden jumped 14.6% after it won approval from its creditors to extend payments for an onshore private bond.
The Hang Seng Index surged 2.51%, or 462.10 points, to 18,844.16, and the Hang Seng China Enterprises Index jumped 3.17%.
Japanese stocks gained, with the Topix renewing a 33-year high as a weaker yen lent broad support and economically sensitive stocks rallied amid a strengthening view that the US economy will avoid recession.
Market sentiment was also buoyed by gains in Chinese equities after Beijing unveiled a new set of stimulus measures.
Thin Trading on US Holiday
The Topix finished the day up 1.02% at 2,368.29, the day’s high point and a fresh 33-year peak. The Nikkei 225 share average added 0.70% to 32,939.18, also the session’s peak and a new one-month high.
Both indexes gained for a sixth straight day, the longest run since mid-May.
Elsewhere, in earlier trade, Sydney, Seoul, Singapore, Mumbai, Taipei, Manila and Jakarta were also in the green.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 1.1%, having climbed 2.3% last week.
A holiday in the United States made for thin trading ahead of key readings on US services and Chinese trade and inflation later in the week.
Investor sentiment on the tech sector will be tested this week by the initial public offering for chip giant Arm Holdings, which is aiming for a price in the range of $47 to $51, valuing the company between $50 billion and $54 billion.
S&P 500 futures and Nasdaq futures were both 0.1% higher. Eurostoxx 50 futures added 0.3% and FTSE futures rose 0.4%.
Treasuries Rise and Fall
Stocks had firmed on Friday after a benign August US payrolls report hardened expectations for an end to rate hikes.
While the headline jobs number topped forecasts, downward revisions to the previous two months and a dip in wage growth pointed to a loosening in the labour market.
The jobless rate also jumped as more people went looking for work, leaving the vacancies to unemployed ratio at its lowest since September 2021.
“This continued rebalancing of the labour market is consistent with our view that the July hike in the Fed funds rate was the last of the cycle,” wrote analysts at Goldman Sachs.
Treasuries initially rallied on the jobs data, but soon ran into selling and longer-dated yields ended Friday higher. There was no trading in cash Treasuries on Monday, but futures eased a little further.
The relative outperformance of the US economy underpinned the dollar at 146.16 yen, not far from its recent 10-month peak of 147.37.
Oil prices were near seven-month highs on tightening supply as Saudi Arabia was widely expected to extend a voluntary 1 million barrel per day oil production cut into October.
Brent firmed 3 cents to $88.58 a barrel, while US crude rose 8 cents to $85.63 per barrel.
Key figures
Tokyo – Nikkei 225 > UP 0.70% at 32,939.18 (close)
Hong Kong – Hang Seng Index > UP 2.51% at 18,844.16 (close)
Shanghai – Composite > UP 1.40% at 3,177.06 (close)
London – FTSE 100 > UP 0.70% at 7,516.69 (0934 BST)
New York – Dow > UP 0.33% at 34,837.71 (Friday close)
- Reuters with additional editing by Sean O’Meara
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