Asian stocks rally on easing rate hike fears, China stimulus hopes

Investing.com– Most Asian stocks rose sharply on Monday as mixed U.S. employment data cemented expectations that the Federal Reserve will keep rates on hold, while markets awaited more stimulus measures from China. 

Regional stocks tracked a strong lead-in from Wall Street on Friday, after mixed and data showed more cooling in the jobs market, which gives the Fed less headroom to keep raising interest rates. This fed expectations that the central bank will keep and potentially the remainder of the year. 

While U.S. rates are likely to remain higher for longer, the prospect of no more rate increases points to some relief for Asian markets, which were battered by rising rates over the past year. 

Chinese stocks lead gains on property market relief, stimulus hopes 

Chinese markets were the best performers in Asia on Monday, with the and indexes rising over 1% each.

Hong Kong’s index surged 1.8%, buoyed chiefly by property stocks as Country Garden Holdings  (HK:) earned bondholder approval to extend some debt deadlines, averting a potential default. The stock jumped nearly 10% and was the top performer on the Hang Seng. 

Heavyweight technology stocks were also supported by the prospect of no more U.S. rate hikes, while oil and gas stocks surged tracking strong crude prices.

Focus is now on any more measures from Beijing to shore up economic growth, particularly more supportive measures for the property market after China increased local dollar liquidity and loosened some mortgage rules last week. 

Markets were also awaiting Chinese this week, after data from last week showed some improvement in the world’s second-largest economy. 

Optimism over China fueled gains in other Asian markets, with Japan’s up 0.4%, while the broader added 0.6%.

South Korea’s added 0.1%, while futures for India’s index pointed to a mildly positive open.

Australian stocks rise with RBA pause on tap

Australia’s index rose 0.4% on Monday, with focus turning to a meeting on Tuesday.

The central bank is widely expected to keep rates on pause, given that Australian inflation has cooled substantially in recent months. The bank is also expected to offer no major changes before a coming overhaul in its top brass, with Deputy Governor Michele Bullock set to take over as Governor after Philip Lowe’s (NYSE:) term ends later this month.

Gains in BHP Group Ltd (ASX:), the biggest stock on the ASX 200, also supported the index, after the anglo-Australian miner said a Brazilian court had approved its plans to reorganize its Samarco joint venture, as part of the repercussions of a 2015 dam collapse that killed 19 people and was Brazil’s worst ever environmental disaster.