Asia: China stimulus hopes and oil price rebound boost stocks

Asian stocks finished higher as speculation on further China stimulus grew and oil prices rebounded.

Markit’s data on manufacturing in the world’s second largest economy on Monday showed a slowdown in the industry, fuelling hopes for more stimulus measures by the People’s Bank of China (PBoC).

“The decline in the readings may have been felt more had it not been for the interest rate cut from the PBoC a couple of weeks ago which should hopefully reverse some of the decline in the months ahead," Barclays Research said.

“The PBOC is also expected to announce further easing measures early next year, which may be providing further support to markets that remain addicted to central bank stimulus.”

Hong Kong’s Hang Seng index rose 1.23%, while Shanghai advanced 3.11%.

In another boost to markets, oil stocks including Inpex Corp. gained as West Texas Intermediate crude rebounded overnight after posting the biggest monthly loss in almost six years in November. Prices have reached a new low after OPEC last week signalled it would take no action to ease a global glut.

“Though the oil industry is entering a new phase of lower prices, cost pressures on unconventional supply are likely to lead to enhanced productivity and capital discipline in the years ahead,” Barclays continued.

“If OPEC has truly abdicated its role as a moderator of price swings, only with pain will OPEC and tight oil producers gain in the long run.”

In Japan, the Nikkei 225 gained 0.42% as the yen weakened against the dollar to support exporters. The rise in Japanese stocks came despite news that Moody’s Investors Service on Monday downgraded its rating on the economy to A1, citing uncertainty over whether the nation will be able to improve growth and reach deficit reduction targets.

Company-wise Haitong Securities Ping An Insurance jumped in Hong Kong following reports Jack Ma, the billionaire founder of Alibaba Group, agreed to invest in the company.

Chinese financial shares rose, including China Minsheng Banking Corp., as money-market rates fell.