(Bloomberg) — Equities in China and Hong Kong were standout gainers on Friday after Beijing’s latest measures to tackle its property crisis. Shares elsewhere in Asia declined with Japan’s benchmark falling.
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The CSI 300 index is poised for its biggest daily gain in 16 years, and both iron ore and Chinese developer stocks rose after three major cities eased rules on home buying. A slump in Japanese stocks contributed to the decline in the MSCI Asia Pacific index, after the victory of Shigeru Ishiba in the race for the leadership of the Japanese ruling party, investors went wrong.
European and US stock futures fluctuate between gains and losses.
“The Chinese government seems more willing to follow through on measures to get the economy fired up again, so it feels more promising than previous attempts,” said Matthew Haupt, portfolio manager at Wilson Asset Management. “So the rally may have more legs than before and we will wait for more announcements to be more confident about the trajectory of China’s economy and stock market.”
Investors are heading into the final quarter of the year as the outlook for financial markets improves after China’s stimulus measures and central banks from Indonesia to Europe and the US begin cutting interest rates to support growth.
Even so, China’s factory activity continued to contract while the service sector slowed in September, data on Monday showed. The country’s poor economic performance has also signaled Europe, its largest trading partner. All three major German carmakers – Volkswagen AG, Mercedes-Benz Group AG and BMW AG – have warned about profits this month.
“While the turnaround is impressive, largely driven by Beijing’s latest stimulus efforts, I am not entirely convinced that the general meeting is built on a solid foundation,” said Billy Leung, investment strategist at Global X Management in Sydney. “This is more like a short-term reaction than a reflection of deeper structural improvements.”
Chinese markets will be closed for the first seven days of October for public holidays. The Hong Kong and Korean stock exchanges will be closed on Tuesday.
In Austria, traditional political powers vowed to prevent the far-right Freedom Party from forming a government after Sunday’s national election, which in its historic victory, marked the latest attempt to stem the rising tide of populism in Europe.
In Japan, the new Ishiba government will seek continuity in economic, monetary and foreign policy, with the role of finance minister going to Katsunobu Kato, a former government spokesman, according to local media.
Yen pared gains from the previous session, while hopes for Chinese stimulus lifted the Australian and New Zealand dollars.
Tensions in the Middle East are at risk of rising again, however, following the assassination of Hezbollah leader Hassan Nasrallah in Beirut by Israel.
Oil was steady on Monday, with the market waiting to see how Iran will respond.
This week, traders will pay attention to Eurozone inflation and manufacturing activity data ahead of Friday’s US jobs report which will help gauge the prospect of Federal Reserve rate cuts at the end of the year.
Some of the main movements in the market:
Savings
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S&P 500 futures were unchanged as of 14:05 Tokyo time
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Nikkei 225 futures (OSE) down 4.6%
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Japan’s Topix down 3.5%
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Australia’s S&P/ASX 200 rose 0.7%
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Hong Kong’s Hang Seng rises 3.4%
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Shanghai Composite up 6.7%
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Euro Stoxx 50 futures were little changed
currency
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1163
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The Japanese yen was little changed at 142.09 per dollar
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The offshore yuan fell 0.1% to 6.9894 per dollar
Cryptocurrencies
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Bitcoin fell 2.1% to $64,433.6
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Ether fell 1.1% to $2,631.1
Bond
Commodity
This story was produced with the help of Bloomberg Automation.
–With assistance from Chris Bourke and Matthew Burgess.
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