SYDNEY – Asian stocks were cautiously higher on Monday as investors braced for the release of China’s industrial and retail data, while awaiting a host of US Federal Reserve officials to speak to vindicate market pricing of rate cuts this year.
The guarded optimism is set to extend to Europe when markets open, with pan-region Euro Stoxx 50 futures up 0.2 percent. Both S&P 500 futures and Nasdaq futures were mostly flat.
In emerging markets, the Turkish lira touched a two-month low after weekend elections looked headed for a runoff, while the Thai baht rallied almost 1 percent after Thailand’s opposition routed military-allied parties also in weekend polls.
On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan reversed earlier losses to be up 0.5 percent, driven by a late rebound in Chinese and Hong Kong shares after a steep sell-off the week before.
Hong Kong’s Hang Seng index charged 1.2 percent higher while China’s blue chips rose 0.6 percent. Japan’s Nikkei advanced 0.7 percent, building on the optimism from last week during the earnings season.
China’scentral bank on Monday held rates on medium-term policy loans steady, although expectations are building that monetary policy easing may be inevitable in coming months to support an economic recovery.
Hong Kong Exchanges & Clearing Ltd (HKEX) on Monday added a new Connect scheme linking markets in the financial hub with the mainland by expanding into onshore interest rate derivatives to help offshore investors in Chinese bonds hedge their exposure.
China is due to report monthly industrial production, retail sales and fixed asset investment data on Tuesday.
“A big year-on-year improvement shouldn’t surprise given it is measured against a stagnant economy that was in lockdown,” said Chris Weston, head of research at Pepperstone.
“However, with China’s data throwing up a few concerns of late – we’ve seen poor import, PPI, and loan data – China’s growth is very much at the heart of market moves,” said Weston. -Reuters
