(Bloomberg) — Stocks in China and Hong Kong were notable gainers on Monday following Beijing’s latest moves to tackle the property crisis. Stocks elsewhere in Asia fell while Japan’s benchmark tumbled.
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The CSI 300 index was heading for a technical bull market, and both iron ore stocks and Chinese developer stocks rose after three major cities relaxed home buying rules. A slump in Japanese shares contributed to a decline in the MSCI Asia Pacific index after Shigeru Ishiba’s victory in the Japanese ruling party’s leadership race came on the back foot.
The Chinese government “seems more focused on pushing ahead with measures to get the economy going again, so it feels a little more promising than previous efforts,” said Matthew Haupt, portfolio manager at Wilson Asset Management. “So the rally may have a bit more legs than previous times and we will wait for more announcements to gain more conviction about the trajectory of the Chinese economy and stock market.”
Investors are heading into the final quarter as the global economic outlook improves following China’s stimulus measures and as central banks in Indonesia, Europe and the US begin cutting interest rates to support growth.
The Federal Reserve’s favorite measure of underlying U.S. inflation and household spending rose modestly in August, underscoring the economy’s cooling. Treasury yields and the dollar were little changed on Monday, with investors expecting the Fed to remain on track for further rate cuts in coming months.
In Japan, Ishiba’s new government will pursue continuity in economic, monetary and foreign policy, with the role of finance minister going to Katsunobu Kato, a former government spokesman, local media said.
The yen pared gains from the previous session, while Chinese stimulus hopes boosted both the Australian and New Zealand dollars.
“While the turnaround is impressive, largely driven by Beijing’s latest stimulus measures, I’m not entirely convinced the rally is built on solid foundations,” said Billy Leung, investment strategist at Global X Management in Sydney. “This feels more like a short-term response than a reflection of deeper structural improvements.”
However, tensions in the Middle East threatened to escalate again following Israel’s assassination of Hezbollah leader Hassan Nasrallah in Beirut.
The oil price was stable on Monday and the market waited to see how Iran will react.
This week, traders will be paying close attention to inflation in the euro zone and data on industrial activity will be released ahead of Friday’s US jobs report, which will help assess the prospects for rate cuts by the Federal Reserve at the end of the year.
Some of the major moves in the markets:
Stocks
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Futures on the S&P 500 were little changed at 12:49 a.m. Tokyo time
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Nikkei 225 futures (OSE) fell 4.9%
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Japan’s Topix fell 3.2%
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Australia’s S&P/ASX 200 rose 0.8%
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Hong Kong’s Hang Seng rose 3%
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The Shanghai Composite rose 5.7%
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Euro Stoxx 50 futures were little changed
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1158
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The Japanese yen fell 0.2% to 142.44 per dollar
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The offshore yuan fell 0.2% to 6.9946 per dollar
Cryptocurrencies
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Bitcoin fell 2% to $64,487.89
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Ether fell 1.4% to $2,623.43
Bonds
Raw materials
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West Texas Intermediate crude rose 0.6% to $68.59 a barrel
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Gold fell 0.2% to $2,653.44 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Chris Bourke and Matthew Burgess.
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