Most Asian stocks rose on Monday, buoyed by persistent optimism over lower interest rates following the Federal Reserve's 50 basis point cut last week. However, gains were limited due to a weak Friday close on Wall Street and a market holiday in Japan.
Chinese markets advanced after the People's Bank of China cut its 14-day reverse repo rate to 1.85% from 1.95%. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.5% and 0.4% respectively, while Hong Kong's Hang Seng index added 0.7%.
Australia's ASX 200 was the worst performer in Asia, losing 0.6% as it retreated from record highs. Supermarket giants Woolworths and Coles Group fell 3-4% after being sued by Australia's competition regulator for allegedly misleading customers over discounts.
Australian economic data showed weakness:
Services PMI Flash came in at 50.6 (Previous 52.5)
Manufacturing PMI Flash fell to 46.7 (Previous 48.5)
Composite PMI Flash dropped to 49.8 (Previous 51.7)
The Reserve Bank of Australia is expected to keep interest rates unchanged at 4.35% in its upcoming meeting on Tuesday, but is likely to maintain a hawkish stance due to sticky inflation and a strong labor market.
New Zealand's trade deficit widened:
Exports fell to 4.97B (Previous 6.09B)
Imports increased to 7.17B (Previous 7.11B)
Monthly Trade Balance worsened to -2203M (Previous -963.0M)
Oil prices rose, with Brent crude futures up 0.5% at $74.29 a barrel and U.S. crude futures up 0.9% at $71.64. Heightened conflict in the Middle East and expectations of increased demand following the U.S. rate cut supported prices.
Gold prices hit a record high in Asian trade, with spot gold rising 0.3% to $2,631.19 an ounce. The yellow metal benefited from lower U.S. interest rates and a softer dollar.
The dollar index and dollar index futures rose slightly in Asian trade, steadying after last week's losses. The Australian dollar gained 0.3% ahead of the RBA meeting, while the Japanese yen weakened 0.3% against the dollar.
Investors await a series of Fed speeches this week, including remarks from Chair Jerome Powell, as well as key U.S. data due on Friday.
European and U.S. stock futures pointed to a positive open, with gains between 0.2% and 0.6%.
Japanese Foreign Minister Yoko Kamikawa is set to meet her Chinese counterpart, Wang Yi, in New York on Monday, amid tensions following recent attacks on Japanese nationals in China.
EURUSD is flat, silver is down 0.4% and gold is up only 0.3%. Cryptocurrency market is set to open higher after the weekend; currently Bitcoin is up 1.5% today and Ethereum is trading almost 4% higher.