Most Asian stock markets started the week on a positive note Monday, with investors looking ahead to important trade talks between Washington and Beijing scheduled for later in the day.
Fresh inflation data from China and encouraging revisions to Japan’s economic growth figures also helped lift spirits across the region, signaling an expected higher open for Indian benchmarks like the Sensex.
A sense of anticipation around the US-China trade discussions seemed to give markets a boost.
This came alongside reports suggesting a slight easing in tensions between the world’s two biggest economies.
China has reportedly given temporary approvals for some rare earth exports, and US plane maker Boeing Co. is said to have started delivering commercial jets again to the Asian giant.
Adding to the mix, China released its latest inflation numbers. Consumer prices (CPI) there fell by 0.1% in May compared to a year ago.
While still showing a slight deflation, this was a smaller drop than the 0.2% economists polled by Reuters had predicted. Producer prices (PPI), however, fell by 3.3% year-on-year, a bit more than the 3.2% dip analysts had expected.
Reacting to these developments, mainland China’s CSI 300 index began the day flat, but Hong Kong’s Hang Seng Index gained a solid 0.86%.
Over in Japan, the benchmark Nikkei 225 climbed 0.91%, and the broader Topix index rose 0.58%.
A significant piece of good news for Japan came from revised figures for its Gross Domestic Product (GDP) for the January to March quarter.
The Cabinet Office announced Monday that the economy shrank at an annualized rate of just 0.2%.
That’s a much better picture than the initially reported 0.7% contraction and topped economists’ expectations, as a Reuters poll had thought the figure would stay the same.
Investors are now keeping a close eye on the Bank of Japan’s next moves, especially after it cut its growth and inflation forecasts for the year at its May 1 meeting.
The central bank has a two-day policy meeting scheduled for next week.
Elsewhere in the region, South Korea’s Kospi index jumped an impressive 1.71%, while the small-cap Kosdaq added 0.46%. Australian markets were closed for a public holiday.
Indian markets look to build on Friday’s rally
Indian stock market benchmarks, the Sensex and Nifty 50, are tipped for a higher open on Monday, taking their lead from the positive mood in global markets and fresh optimism about US-China trade talks.
Trends on Gift Nifty also pointed to a firm start for Indian stocks, with Gift Nifty trading around the 25,175 level – a premium of nearly 80 points from Nifty futures’ previous close.
This follows a strong finish to last week for the Indian market. On Friday, stocks rallied, with the Nifty 50 notably closing above the key 25,000 mark.
That surge was largely thanks to the Reserve Bank of India (RBI) cutting its repo rate by 50 basis points (bps) to 5.50% and also trimming the Cash Reserve Ratio (CRR) by 100 bps to 3%.
On Friday, the Sensex had climbed 746.95 points, or 0.92%, to close at 82,188.99, while the Nifty 50 ended 252.15 points, or 1.02%, higher at 25,003.05.
US markets ended last week strong
US equity futures were mostly flat in early Asian trading on Monday.
This came after a solid session on Wall Street last Friday, where all three major benchmarks jumped following better-than-expected non-farm payrolls data.
The US economy added 139,000 jobs in May, the Bureau of Labor Statistics reported, beating the Dow Jones forecast of 125,000, though it was less than the downwardly revised 147,000 jobs added in April.
The Dow Jones Industrial Average climbed 443.13 points, or 1.05%, to close at 42,762.87, having been up by more than 600 points at its highest point in the session.
The broad-based S&P 500 also gained 1.03%, pushing past the 6,000 level for the first time since late February to settle at 6,000.36. The Nasdaq Composite rallied 1.20% to finish at 19,529.95.
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