Asian stocks were predominantly up in early trading following a new record for US equities, driven by robust corporate earnings and China’s efforts to bolster its property market. Asian stocks climbed on Monday, buoyed by China’s policy decisions. The market’s upward movement mirrored gains in US markets, with investors eagerly anticipating economic data.
In efforts to stimulate its property market, China opted to maintain its one- and five-year loan prime rates at 3.45% and 3.95%, respectively. The five-year loan prime rate serves as China’s benchmark lending rate
Equities in Australia and Japan increased, and futures for Hong Kong indicated early gains on Monday. US stock futures also inched up after the S&P 500 Index rose on Friday and the Dow Jones Industrial Average surpassed 40,000 for the first time.
Stocks in Asia
During morning trading hours, Japan’s Nikkei index outperformed other Asian indices, posting a gain of 560 points or 1.44% to reach 39,347. Hong Kong’s Hang Seng index also saw an increase of 0.34% to 19,620. The Korean index Kospi rose by 0.67% to 2,742.77. The Asia Dow climbed by 0.67% to 3,495.83. The Shanghai Composite, China’s index, was trading 0.50% higher at 3,169.80. Indian stock markets remained closed due to general elections.
On Monday, traders will closely monitor developments in China following Beijing’s efforts to revive the country’s struggling property market, although there are lingering concerns that the measures may be insufficient. The recent surge in Chinese stocks has also positively influenced Asian shares, with the MSCI Asia Pacific Index rising for six consecutive days, equalling its longest winning streak of the year.
Market participants will monitor the aftermath of a helicopter crash involving Iranian President Ebrahim Raisi in dense fog, with early trading seeing a decline in oil prices. Bloomberg’s dollar index remained relatively stable on Monday, following a decrease last week, as traders adjusted their positions regarding the Federal Reserve’s outlook after April’s inflation eased more than anticipated by economists. A series of speeches from Fed officials is scheduled for this week, including one from Governor Christopher Waller focusing on the US economy and monetary policy.
Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management, stated, “We maintain our expectation for the Fed to reduce rates by 50 basis points this year, with further cuts in 2025 and 2026. This creates a favorable macro environment supportive of our investment strategy favoring high-quality bonds and stocks.”
Market observers are keeping a close eye on the aftermath of a helicopter accident involving Iranian President Ebrahim Raisi in dense fog, with early trading witnessing a decrease in oil prices. Bloomberg’s dollar index remained relatively steady on Monday, following a decline last week, as traders adjusted their positions in response to the Federal Reserve’s outlook, given that April’s inflation eased more than economists had predicted. A series of speeches from Fed officials is scheduled for this week, including one from Governor Christopher Waller, which will focus on the US economy and monetary policy.
Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management, affirmed, “We maintain our expectation for the Fed to lower rates by 50 basis points this year, with additional reductions anticipated in 2025 and 2026. This sets the stage for a favorable macroeconomic environment that supports our investment strategy, which favors high-quality bonds and stocks.”
Investors will be waiting for Japanese inflation and business activity data this week. Further, market participants will watch out for April inflation data and Q1 figures of Singapore’s GDP.
In summary, Asian stocks rose in early trading, following a record-setting performance in US equities driven by strong corporate earnings and China’s efforts to support its property market. China maintained its lending rates to stimulate the property market. Equities in Australia and Japan increased, and futures for Hong Kong indicated early gains.
Market attention is on China’s property market revival efforts and the aftermath of a helicopter crash involving the Iranian President. Additionally, investors await economic data and speeches by Federal Reserve officials, with expectations of further rate cuts. Japanese inflation and business activity data, as well as Singapore’s GDP figures, will also be closely monitored. Overall, these factors shape the current landscape of Asian markets and influence investment decisions.
