Investing.com — Asian stocks were mostly higher on Monday, while Chinese markets recorded heavy volatility after Beijing gave somewhat mediocre signals on its plans to distribute fiscal stimulus, as inflation data from the country was disappointing.
Asian trading volumes were somewhat slow due to the Japanese market holiday.
Regional markets received positive signals from Wall Street, with the Wall Street Index hitting record highs on Friday tracking some positive earnings from major banks.
The focus this week is on more third-quarter earnings, as well as statements from a series of Federal Reserve officials.
Chinese stocks are volatile as markets weigh stimulus and weak inflation
Chinese stocks registered sharp volatility in morning trade, with indices sharply paring early gains to trade 0.2% higher by 22:05 ET (02:05 GMT). Both indexes rose by as much as 2%.
China’s Finance Ministry said over the weekend it would roll out fiscal stimulus measures, including more debt issuance and support for provincial governments.
But officials ignored key details, specifically the scope and timing of the planned measures, dampening public enthusiasm for the measures.
Analysts at ANZ said the measures would “significantly increase government debt”.
Investors are skeptical about the progress Beijing has in enacting fiscal stimulus, given the country’s already strained debt levels.
Economic data from China showed continued weakness. It unexpectedly weakened in September, while contracting for the 23rd straight month.
Mixed sentiment towards China was best reflected in Hong Kong markets, where they fell more than 2% in choppy trade.
Chinese stocks have achieved strong gains over the past few weeks, after Beijing announced a new round of monetary stimulus in late September. But the lack of clear details about the planned actions led to this rally fading in recent sessions.
Chinese trade data due later on Monday is expected to provide further economic signals.
Asian stocks track Wall Street gains
Broader Asian markets advanced, tracking a positive session on Wall Street. The Australian index added 0.4%, also receiving some support from the prospect of increased stimulus in China, the country’s largest trading partner.
The index fell 0.4% as Japanese markets closed for holiday.
South Korea’s index added 0.4%, while India futures pointed to a negative open, as the index struggled to hold around the 25,000 point level.
Indian data is due later the same day, and is expected to show a sharp increase for September.