Most Asian stocks increased on Monday, driven by stimulus measures in China. Technology-heavy indices also advanced as investors bought into the sector ahead of key earnings reports this week. Regional markets continued to build on last week’s gains, bolstered by softer U.S. inflation data which has ramped up hopes that the Federal Reserve will cut interest rates this year. Wall Street hit record highs last week, and U.S. stock index futures rose further in Asian trade on Monday.
This week, investors are focusing on cues from the minutes of the Federal Reserve’s late-April meeting, as well as addresses from several Fed officials. In China, the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.2% and 0.3%, respectively, reaching seven and eight-month highs. Recent supportive measures for the economy, particularly the property market, contributed to these gains. Beijing had loosened home-buying restrictions across several major cities and reportedly instructed state governments to begin purchasing houses. Additionally, China kept its benchmark loan prime rate at record lows on Monday.
However, gains in Chinese markets were limited by weak economic readings for April, with sluggish retail spending and capital investment indicating that more stimulus measures might be necessary. Concerns over a renewed trade war with Washington also weighed on the market, following Beijing’s ban on some U.S. firms from importing and exporting activities related to China. This move was seen as potential retaliation for a recent increase in U.S. tariffs on key Chinese industries.
Technology-heavy indexes were among the better performers for the day. Japan’s Nikkei 225 index rose 1.3%, while South Korea’s KOSPI increased by 0.6%, and Hong Kong’s Hang Seng added 0.4%. Investors bought into the sector ahead of Nvidia Corporation’s quarterly earnings report, which is due this Wednesday, seeking more cues on whether demand for the growing AI industry remains strong. Nvidia is seen as a key indicator for the tech industry, particularly given its significant role in the AI sector, and the firm had effectively led an AI-driven spike in valuations across the tech sector. Optimism over declining U.S. interest rates also supported tech stocks.
Broader Asian markets also advanced. Australia’s ASX 200 rose 0.6%, driven by a rally in copper and other metal prices which strengthened mining stocks. Thailand’s SET Index increased by 0.2%, boosted by stronger-than-expected first-quarter GDP data.
Fidelity Asian Values Plc (LON:FAS) provides shareholders with a differentiated equity exposure to Asian Markets. Asia is the world’s fastest-growing economic region and the trust looks to capitalise on this by finding good businesses, run by good people and buying them at a good price.
