Asian equities were broadly higher on Monday as investors assessed the implications of ongoing geopolitical tensions, steady policy signals from China, and political uncertainty in Japan.
Markets were also bracing for a busy week ahead, with a flurry of earnings reports, US housing data, and comments from central bank officials on the agenda.
China and Hong Kong stocks lead Asia markets higher
Chinese markets advanced after the People’s Bank of China left its benchmark lending rates unchanged, as expected.
The one-year loan prime rate was maintained at 3.0 percent, while the five-year rate—which influences mortgage pricing—was kept at 3.5 percent.
The Shanghai Composite Index rose 0.4 percent following the announcement.
In Hong Kong, the Hang Seng Index gained 0.4 percent, supported by reports suggesting that US President Donald Trump and Chinese President Xi Jinping could hold a meeting before the Asia-Pacific Economic Cooperation (APEC) summit in October.
By mid-morning, the Hang Seng Index was up 0.6 percent at 24,963.07, on track for its highest close since January 21, 2022.
The Hang Seng Tech Index also rose by 0.8 percent. Markets in the city resumed trading despite severe disruptions caused by Typhoon Wipha over the weekend, which triggered the highest weather warning signal, injured dozens, and grounded flights.
Optimism surrounding China’s economic resilience and a broader risk-on sentiment in global equities supported gains in Hong Kong, with the benchmark index building on Friday’s rally, which had pushed it to a three-year high.
Japan markets closed as political turmoil unfolded
Japanese markets were closed for the day, following national elections that saw the ruling coalition lose its majority in the upper house.
Prime Minister Shigeru Ishiba, facing political pressure, said he has no plans to resign and intends to focus on strengthening Japan’s economic diplomacy.
The loss is seen as a blow to Ishiba’s administration, which had already been grappling with declining public support.
Other regional markets
In South Korea, the Kospi Index rose nearly 0.5 percent, led by strength in large-cap technology stocks.
The gains came as investors remained cautiously optimistic ahead of key macroeconomic data from the US and further global earnings updates.
Meanwhile, Australia’s S&P/ASX 200 Index declined nearly 1 percent, snapping a streak that had seen it reach record highs in the previous session.
Market participants remained wary ahead of the Reserve Bank of Australia’s meeting minutes and an upcoming speech by RBA Governor Michele Bullock, which could offer further insights into the central bank’s policy outlook.
Wall Street on Friday
US stocks closed Friday’s session with little direction, as major indices fluctuated throughout the day and struggled to maintain early gains.
The Nasdaq Composite eked out a modest rise of 10.01 points, or 0.1 percent, to close at a new record high of 20,895.66.
The S&P 500 edged down 0.57 points to 6,296.79, while the Dow Jones Industrial Average fell 142.30 points, or 0.3 percent, to 44,342.19.
Despite the subdued finish, the tech-heavy Nasdaq gained 1.5 percent over the week, with the S&P 500 up 0.6 percent.
The Dow posted a slight weekly loss of 0.1 percent.
Early strength in the session was attributed to positive economic data released on Thursday, which had allayed some fears over the broader impact of President Trump’s ongoing trade disputes.
However, buying momentum faded quickly, with traders opting to take profits after the Nasdaq and S&P 500 touched fresh intraday highs.
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