Asian stocks markets saw a positive trend on Monday, driven by China’s recent stimulus measures and strength in the technology sector.
Most regional markets experienced gains from last week, spurred by softer U.S. inflation data that fueled expectations of a Federal Reserve interest rate cut later this year. Wall Street reached new record highs, with U.S. stock index futures continuing to rise during Asian trading hours on Monday.
This week, investors are also focusing on the minutes from the Fed’s late-April meeting and speeches from several Fed officials for further guidance.
Chinese Stocks at 2024 Highs Amid Stimulus Measures
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose by 0.2% and 0.3%, respectively, on Monday, hitting seven and eight-month highs. This follows a series of economic support measures, particularly targeting the property market, implemented by Beijing last week to boost a sluggish economic recovery.
China relaxed home-buying restrictions in several major cities and directed state governments to purchase houses. Additionally, the country maintained its benchmark loan prime rate at record lows on Monday.
Despite these measures, gains in Chinese markets were tempered by lukewarm economic data for April. Retail spending and capital investment remained weak, suggesting the need for further stimulus. Concerns over a potential renewed trade war with the U.S. also weighed on the markets, following Beijing’s ban on certain U.S. firms’ import and export activities, seen as a retaliation to increased U.S. tariffs on key Chinese industries.
Tech Sector Advances Ahead of Nvidia Earnings
Technology-heavy indexes were among the best performers on Monday. Japan’s Nikkei 225 rose by 1.3%, South Korea’s KOSPI by 0.6%, and Hong Kong’s Hang Seng by 0.4%.
Investors showed strong interest in the tech sector ahead of Nvidia Corporation’s (NASDAQ:NVDA) quarterly earnings report, scheduled for Wednesday. Nvidia is a key player in the tech industry, particularly due to its significant role in the burgeoning AI sector, which has driven a surge in tech valuations over the past year.
Tech stocks also benefited from last week’s optimism over declining U.S. interest rates, which reduced Treasury yields.
Broader Market Gains
Other Asian markets also advanced. Australia’s ASX 200 rose by 0.6%, bolstered by a rally in copper and other metal prices, which strengthened mining stocks. Thailand’s SET Index climbed by 0.2%, following GDP data that showed stronger-than-expected economic growth in the first quarter.
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