Asia: Hopes of further Chinese stimulus lead equities higher

Asian equity markets advanced on Monday, led higher by expectations the Chinese government will implement further stimulus measures.

News of an imminent boost from China drove Hong Kong’s Hang Seng 1.62% higher, led by Macau casinos, Chinese financial firms and energy stocks.

Hong Kong-listed shares of mining giant Glencore jumped as much as 71% before closing up 17.7%, as the group continues to reassure investors over the state of its finances.

Chinese mainland markets are closed until Thursday for a bank holiday, with investors in the world’s second-largest economy seemingly buoyed by the prospect of further economic stimulus, while the US Federal Reserve seems set to hold interest rates steady for a while longer.

“Economic data around the globe is coming in disappointing, with what started in China now rippling out across everyone’s shores,” said Jonathan Sudaria from London Capital Group.

"In light of this slowdown, expectations are that central banks will err on the dovish side, with the Fed and BoE expected to refrain from hiking rates and the PBoC, BoJ and ECB all expected to help out with some form of stimulus.”

Japan’s Nikkei 225 Stock Average climbed 1.58%, despite a report showing growth in the country’s services sector slowed down in September. The Nikkei Japan Services purchasing managers’ index for September declined to 51.4 from a two-year high of 53.7 registered in August.

Elsewhere, Australia’s S&P/ASX 200 gained 1.95%, while South Korea’s Kospi edged 0.44% higher.

On the currencies front, the yen declined 0.30% against the dollar, while the Australian dollar rose 0.67% against its American counterpart. Meanwhile, the Indonesian rupiah gained 1.20% against the greenback, reaching its highest level against the dollar in almost two weeks.

“Asia FX and the tone in emerging markets assets in general are benefitting from the weak non-farm payrolls on Friday,” said analysts at Deutsche Bank.