Asian stocks opened the week with resilience, buoyed by Beijing’s efforts to stabilize the local market despite concerns over the liquidation of China Evergrande, a major property giant. However, the geopolitical tensions tempered investor sentiment. The upcoming Federal Reserve policy meeting also kept markets cautious, with the dollar and U.S. Treasury yields hovering within recent ranges.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7% (as of 07:00 GMT), reflecting a generally upbeat mood in the region. Hong Kong’s Hang Seng initially gained ground but trimmed gains after a court order to liquidate Evergrande. Mainland China blue chips struggled early in the session, eventually slipping 0.64%. However, optimism surrounding Chinese stimulus measures provided a boost to other markets. Japan’s Nikkei closed up 0.77%, while South Korea’s Kospi advanced 1.47%.
U.S. stock futures pointed slightly lower after the S&P 500 snapped five consecutive days of fresh all-time closing highs. Continued moderation in U.S. consumer inflation data added to expectations for future Fed rate cuts, although policymakers appear to have little pressure to rush. Market participants eagerly await clues from the upcoming Fed meeting on the timing of potential rate cuts. While economists lean towards June, traders are split on the possibility of a March move.
The U.S. dollar index remained steady, while long-term Treasury yields declined slightly. In energy markets, Brent crude futures rose amid escalating Middle East conflict risks, reaching $83.84 a barrel, while U.S. West Texas Intermediate crude also gained ground.
Despite Evergrande concerns and geopolitical tensions, Asian stock markets demonstrated resilience at the start of the week, driven by optimism surrounding Chinese stimulus measures and anticipation for the Fed’s policy outlook.
