Most Asian stocks rose on Monday, extending last week’s recovery amid growing hopes that fears of a U.S. recession were overblown, with focus shifting squarely to a series of key inflation readings this week.
Chinese markets lagged their peers, largely missing out on last week’s rally amid ongoing concerns about the country’s slowing economy. A series of third-quarter earnings are also due this week.
A market holiday in Japan has led to lower trading volumes in Asia, although they remain high.
Regional markets received positive signals from a strong close on Wall Street on Friday, as U.S. stock indexes erased all losses from last week. U.S. stock index futures were slightly lower in Asian trading.
Much of the focus this week will be on U.S. consumer price index data due on Wednesday for further clues on when the Federal Reserve will start cutting interest rates. Investors are divided on whether to cut rates by 25 and 50 basis points in September.
South Korea was the best performer in Asia, rising 0.9%, helped by gains in technology stocks.
Australian shares rose 0.5%, while most Southeast Asian markets were slightly higher.
Chinese stocks lag behind, huge gains on the way
Chinese stocks moved in a flat-to-low range on Monday, while Hong Kong’s index fell 0.2%.
Sentiment towards China remained subdued due to ongoing concerns about the country’s slowing economic recovery, especially after a series of weak readings in July.
Although recent inflation data has shown some improvement, it remains to be seen whether the deflationary trend in China is reversing.
This week focuses on earnings from some of China’s biggest internet companies, with Tencent Holdings Ltd (HK:), alibaba JD.com Group (NYSE:) (HK:) and JD.com (HK:) (NASDAQ:) are scheduled to report third-quarter results for June this week.
Indian markets await quiet opening amid Hindenburg-SECI standoff
Indian stock indices pointed to a weak opening on Monday, as sentiment towards Indian markets was hit by fresh allegations against India’s securities regulator by short seller Hindenburg Research.
The company alleged that Securities and Exchange Board of India (SEBI) Chairperson Madhab Puri Bhutto invested in offshore funds linked to the Adani Group. This comes after Hindenburg last year took a short-term stand against Adani over allegations of fraud and share price manipulation against the Indian conglomerate.
The Securities and Exchange Board of India on Sunday issued an advisory, asking investors to remain calm before reacting to any reports from Hindenburg.
The Nifty and AA were nearing record highs after a stunning rally through most of 2024. But that also made Indian stocks more vulnerable to volatility and profit-taking.
Crude oil data from India is also due on Monday, and is expected to show some slowdown in price pressures.
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