Asia report: Most markets rise despite China disappointment

Asia-Pacific markets were mostly positive on Monday as investors reacted to news from China and anticipated economic data releases from the region later in the week.

China’s stock markets saw a notable recovery, closing higher after volatile trading sessions.

“Following the generally positive signals from Wall Street on Friday, Asian stock markets are trading mostly higher on Monday,” said Patrick Munnelly at TickMill.

“Traders are reacting to the report showing producer prices in the United States were unexpectedly unchanged in September, so reinforcing optimism the US Fed will continue lowering interest rates in the next months, although hopes for another 50 basis point cut next month mostly evaporated.

“Following an upside surprise in the September CPI report, producer prices fell short of forecasts and supported a 25 basis point rate drop in November.”

Munnelly said Beijing's weekend stimulus pledges elicited a mixed and turbulent response in Chinese markets on Monday, with investors offering no consensus on promises made over that were “strong on purpose” but “short on details”.

“Hong Kong equities ceded early gains falling sharply, in contrast to mainland Chinese peers, which largely traded higher.

“The mixed performance seemed driven by a lack of a dollar amount for the package, which may have been more important to foreign investors than their Chinese counterparts.

“The broad actions, which ranged from assisting local governments with their financial issues to supporting the property market and replenishing state bank capital, demonstrated authorities' commitment to bolstering the struggling Chinese economy.”

China leads gains on mixed day for region

In mainland China, the Shanghai Composite rose 2.07% to close at 3,284.32, while the Shenzhen Component surged 2.65% to 10,327.40.

Key gainers included Espressif Systems Shanghai, which jumped 15.73%, and Chongqing Construction Engineering Group, up 10.16%.

Hong Kong's Hang Seng Index, however, fell by 0.75% to 21,092.87, weighed down by significant losses in consumer stocks.

ANTA Sports Products dropped 8.69%, while Zhongsheng Group Holdings and Budweiser Brewing Company lost 6.92% and 5.33%, respectively.

In South Korea, the Kospi 100 rose 1.17% to 2,635.56, supported by gains in key stocks like KB Financial Group, which surged 6.46%.

Entertainment giant Big Hit Entertainment also climbed 4.66%.

Australia's S&P/ASX 200 advanced by 0.47% to 8,252.80, driven by strong performances in the mining sector.

Gold-focused stocks like Regis Resources and Bellevue Gold saw respective increases of 6.02% and 4.41%, as gold prices remained steady.

Conversely, New Zealand’s S&P/NZX 50 slipped 0.61% to 12,766.75, as weakness in consumer and healthcare stocks dragged the index lower.

Synlait Milk fell 2.5%, and Oceania Healthcare dropped 2.47%.

Traders in Japan were enjoying a day off for the Sports Day holiday.

In currency markets, the dollar was last up 0.2% on the yen to trade at JPY 149.43, while it increased 0.32% against the Aussie to AUD 1.4861, and climbed 0.35% on the Kiwi, changing hands at NZD 1.6425.

Oil prices declined, with Brent crude futures last down 1.32% on ICE at $78.00 per barrel, and the NYMEX quote for West Texas Intermediate falling 1.34% to $74.55.

China trade growth weakens further, core inflation slows significantly

In economic news, fresh data released on Monday showed weaker-than-expected trade growth in China in September, adding to concerns about the country's economic recovery.

According to figures released by China's customs agency, exports rose by 2.4% year-on-year, while imports increased by just 0.3%, both well below forecasts.

Analysts had predicted export growth of 6% and a 0.9% rise in imports, highlighting the slowdown in China's trade sector, a critical driver of its economy.

The disappointing figures followed an 8.7% rise in exports in August, with analysts pointing to weakening global demand and domestic challenges such as sluggish consumer spending and a continued property market slump.

Inflation data released on Sunday further underscored the concerns, as core inflation rose just 0.1% in September, the slowest pace since early 2021.

In response to the economic slowdown, China’s finance minister Lan Fo’an said in a much-anticipated press conference on Saturday that the government had substantial room to expand its debt and budget deficit.

However, specific policies remained under discussion, leaving investors uncertain about the scope of upcoming stimulus measures.

While Lan signalled that further support was on the way, it was unclear whether any potential stimulus would meet market expectations, particularly regarding its impact on consumption and real estate.

Vice minister of finance Liao Min added that local governments could use special bonds for land purchases and existing housing subsidies, hinting at new measures to stabilise the struggling property market.

However, details on reducing real estate-related taxes remained unspecified.

Looking ahead, key economic reports due later in the week, including third-quarter GDP, retail sales, and industrial production figures, would provide further insight into China's economic health.

In Singapore, the economy showed stronger-than-expected growth in the third quarter.

Preliminary estimates from the Ministry of Trade and Industry revealed that GDP expanded by 4.1% year-on-year, accelerating from the previous quarter's 2.9% growth.

The rise exceeded economists’ forecasts of 3.8% growth.

On a quarterly basis, the economy grew 2.1%, significantly faster than the 0.4% growth recorded in the second quarter.

Reporting by Josh White for Sharecast.com.