Asia report: Markets rise ahead of US election, China legislative session

Asia-Pacific markets rallied on Monday as investors awaited key developments in the United States and China.

Anticipation of the US presidential election and Federal Reserve monetary policy decisions spurred optimism, while investors closely monitored the opening of China’s parliamentary session, where authorities were expected to outline new fiscal support measures by Friday.

“The rebound in sentiment from Wall Street on Friday has helped Asian stock markets trade mostly higher on Monday,” said Patrick Munnelly at TickMill.

“However, traders are still cautious because of the ongoing geopolitical tensions in the Middle East, the uncertainty surrounding the outcome of the US election, and the impending monetary policy announcement from the US Federal Reserve.

“Along with the Federal Reserve, the Bank of England, the Reserve Bank of Australia, Riksbank and Norges Bank will all make rate decisions this week, giving investors global monetary policy catalysts.”

Munnelly said the Federal Reserve was expected to cut interest rates on Thursday regardless of the election result, with further cuts anticipated in December, though that could change depending on the president-elect.

“The Bank of England and Riksbank are also expected to cut rates, while other central banks are likely to hold steady.

“Oil prices have risen after OPEC+ delayed a planned production increase, indicating concerns about global demand.

“The standing committee of China's National People's Congress (NPC) will meet from 4 to 8 November, and it will be eagerly monitored for more information on a number of previously announced stimulus measures.”

Markets in Japan remained closed for the Culture Day holiday.

Stock indices close higher across the Asia-Pacific region

In China, markets made notable gains, with the Shanghai Composite up 1.17% to 3,310.21 and the Shenzhen Component advancing 1.99% to 10,663.10.

Key movers included HNA Technology, which surged 11.83%, and Shanghai Trendzone Construction Decoration Group, rising 10.21%.

Hong Kong’s Hang Seng Index added 0.3% to reach 20,567.52, led by gains from Trip.com Group, Geely Automobile, and BYD Co, which increased 4.79%, 4.62%, and 3.53%, respectively.

South Korea’s Kospi 100 climbed 1.87% to 2,590.04, bolstered by double-digit gains from EcoPro Materials, Hanmi Pharm, and Korea Zinc.

In Australia, the S&P/ASX 200 rose 0.56% to 8,164.60, with Telix Pharmaceuticals, Clarity Pharmaceuticals, and Westgold Resources posting over 3% gains.

New Zealand’s S&P/NZX 50 also saw a modest increase, up 0.25% at 12,590.60, supported by a 6.25% jump from Serko.

In currency markets, the dollar was last down 0.84% on the yen, trading at JPY 151.72, as it slipped 0.56% against the Aussie to AUD 1.5160, and retreated 0.4% from the Kiwi, changing hands at NZD 1.6703.

Oil prices rose significantly, with Brent crude futures last up 2.95% on ICE at $75.26 per barrel, and the NYMEX quote for West Texas Intermediate increasing 3.12% to $71.66.

China lowers foreign shareholder capital threshold, thaws Australia trade relations

In economic news, China reduced the capital threshold for non-controlling foreign shareholders in listed firms late on Friday, cutting the minimum requirement from $100m to $50m, according to a joint statement from the Ministry of Commerce and China Securities Regulatory Commission.

The updated policy also opened the door for foreign individuals to make “strategic investments” in publicly-traded Chinese companies.

Meanwhile, China’s Commerce Minister Wang Wentao urged Australia to maintain a fair business environment for Chinese enterprises in discussions with Australian Trade Minister Don Farrell on Sunday.

The meeting, held during the China International Import Expo in Shanghai, saw Wang pledge to resume Australia’s live lobster exports to China by Christmas, a commitment reaffirmed following an agreement between Australian Prime Minister Anthony Albanese and Chinese Premier Li Qiang in October.

While sanctions remained on two Australian beef exporters, Farrell noted that Wang would personally oversee efforts to restore their access, signalling a gradual warming in trade relations between the two nations.

Reporting by Josh White for Sharecast.com.