Asian stocks saw gains on Monday, led by Japanese stocks, as strong U.S. payrolls data eased concerns of an economic slowdown. The market also reacted positively to hopes of more stimulus measures in China.
Regional stocks took cues from a Friday rally on Wall Street, following a better-than-expected nonfarm payrolls reading. This data dispelled worries of a U.S. recession but also reduced expectations for a significant interest rate cut.
U.S. stock index futures showed a slight increase in Asian trade.
Trading volumes in Asia were limited due to the Golden Week holiday in China. However, Chinese markets are expected to rise sharply when trading resumes on Tuesday, fueled by optimism over additional stimulus measures.
Japanese Stocks Lead Gains as Yen Declines
Japanese indexes performed the best in Asia on Monday, with gains between 1.8% and 2%. The weakening Japanese yen also contributed to the market rally, amidst doubts about the Bank of Japan's ability to raise interest rates further.
Seven & i Holdings Co., Ltd. surged over 3% after reports of a stake sale in its supermarket unit ahead of a planned listing. Additionally, Alimentation Couche Tard Inc received support from Quebec's public pension fund for a takeover bid for Seven & i.
Hong Kong Stocks Up, Focus on China Stimulus
Hong Kong's index rose by 0.6%, continuing a streak of gains driven by optimism over more Chinese stimulus. Mainland Chinese markets are expected to see strong gains upon reopening after the Golden Week holiday.
China's top economic planner is set to announce more stimulus measures on Tuesday, following previous strong actions in late September. This has helped mainland indexes recover from near eight-month lows.
Optimism over China's economy also lifted broader Asian markets, with South Korea and Australia seeing gains. However, India's index pointed to a muted open after a sharp decline from record highs in September.
This week, attention is on U.S. Federal Reserve officials' speeches and consumer inflation data. Traders are adjusting expectations for a potential rate cut by the Fed in November.
Analysis: The positive performance of Asian stocks, driven by strong U.S. data and China stimulus hopes, indicates improving market sentiment. Investors should monitor developments in China and the U.S. Federal Reserve for potential impact on global markets and adjust their investment strategies accordingly.