Asian markets edged up on Monday as investors awaited signals from an upcoming meeting of China’s top policymakers, which is anticipated to introduce new fiscal stimulus measures.
However, the potential uncertainty surrounding the US elections capped broader market gains.
Trading volumes were subdued in part due to a public holiday in Japan, with Nikkei 225 futures slipping by 0.2%.
The uptick in Asia was partly supported by Friday’s US nonfarm payrolls report, which came in below expectations.
The softer labor market data fueled optimism that the Federal Reserve may lean toward easing interest rates.
Investors also kept a close eye on an upcoming Fed meeting later this week.
Chinese stocks lifted by NPC session
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose by 0.5% and 0.3%, respectively, while Hong Kong’s Hang Seng index added 0.7% on Monday.
The Standing Committee of China’s National People’s Congress (NPC) kicked off a four-day meeting, during which the committee is expected to outline additional fiscal measures to stimulate growth.
Recent reports suggest that the NPC may approve as much as $1.4 trillion in new debt over the coming years to counteract challenges in China’s economy, including persistent deflation and ongoing turbulence in the property sector.
This meeting is anticipated to provide more clarity on the scale and timeline of fiscal support measures previously hinted at by Beijing.
While Chinese markets initially rallied on the promise of government support, skepticism over the actual implementation dampened these early gains.
Australian stocks maintain strength as RBA holds center stage
Australia’s ASX 200 index inched up by 0.3%, hovering near recent highs, with the focus shifting to the Reserve Bank of Australia (RBA) meeting scheduled for Tuesday.
While the RBA is widely expected to hold interest rates steady, analysts predict a potentially cautious stance due to persistent inflation in the Australian economy.
The RBA may signal a delay in any planned rate cuts, underscoring its concern over inflation and robust labor conditions.
ANZ forecasts that the RBA might only start trimming rates in early 2025.
Broader Asian markets experienced modest gains, though trading remained tentative ahead of the US elections and Federal Reserve updates.
Eyes on US election tight race
Recent polling data suggests a closely contested US election, with Donald Trump and Kamala Harris locked in a tight race.
Growing speculation over a possible Trump win has added pressure to Asian markets, as Trump has signaled an intention to enforce heavy trade tariffs on China.
Elsewhere, South Korea’s KOSPI index climbed 1.4%, benefiting from strength in its domestic chip manufacturing sector, which outperformed other regional stocks on Monday.
In India, futures for the Nifty 50 indicated a flat start.
Indian stocks have recently faced pressure after peaking in October, with upcoming earnings reports expected to influence the week’s trading direction.
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