Most Asian markets climbed on Monday following data indicating fewer US jobs were created last month, renewing optimism that interest rates may be cut this year. Mainland Chinese equities also bounced on hopes for fresh government economic support.
A tech rally propelled the Nasdaq, leading Wall Street up after Friday’s non-farm payrolls figures. The data helped allay concerns that high inflation figures earlier in the year would keep borrowing costs at elevated levels.
April’s NFP report revealed 175,000 new jobs, significantly lower than the previous month and falling short of expectations. Wage growth was also slightly lower than forecast.
While the figures indicated a slowdown in the world’s second-largest economy, they did not raise fears of an impending recession.
The news increased bets on the Fed cutting rates in September, with investors revising their outlook. However, the anticipated rate cuts remain below the six initially envisaged at the start of the year.
“The softer wage growth and a slight increase in unemployment may ease some of the Federal Reserve’s concerns about implementing rate cuts this summer,” said Stephen Innes at SPI Asset Management.
Wall Street’s gains on Friday, along with another record for London, provided Asian investors with a positive lead, prompting most markets to follow suit.
Shanghai stood out as mainland investors returned from a long break, catching up with the global rally of the past few days. Traders also welcomed reports of potential measures to support China’s property sector and provide fresh support to the economy.
Market sentiment appeared to be incrementally improving, with factors such as improving traveler figures, market reforms, and strong corporate releases cited by Nicholas Yeo of abrdn.
Hong Kong extended recent gains into a tenth successive trading day, while Sydney, Singapore, Taipei, and Manila also posted gains. Wellington and Jakarta experienced slight declines.
The dollar strengthened against the yen, recovering some of the losses it incurred Friday following the US jobs report. The Japanese unit had a volatile week, hitting its weakest level in 34 years, prompting reported intervention in forex markets by authorities on Monday and Wednesday.
– Key figures around 0300 GMT –
Hong Kong – Hang Seng Index: UP 0.2 percent at 18,505.51
Shanghai – Composite: UP 1.0 percent at 3,135.57
Tokyo – Nikkei 225: Closed for a holiday
Dollar/yen: UP at 153.75 yen from 152.99 yen on Friday
Euro/dollar: DOWN at $1.0765 from $1.0767
Pound/dollar: UP at $1.2549 from $1.2546
Euro/pound: UP at 85.79 from 85.78 pence
West Texas Intermediate: UP 0.4 percent at $78.38 per barrel
Brent North Sea Crude: UP 0.3 percent at $83.19 per barrel
New York – Dow: UP 1.2 percent at 38,675.68 (close)
London – FTSE 100: UP 0.5 percent at 8,213.49 (close)
