Asian stock markets exhibited mixed performance on Monday, influenced by the mixed signals from Wall Street on Friday. Strong gains in China and Hong Kong were partially offset by steep losses in Japan. This variation in performance is largely due to traders digesting the recent stimulus measures introduced by the Chinese government aimed at boosting growth in the world's second-largest economy. Overall, Asian markets had closed mostly higher on Friday.
The Chinese authorities announced additional measures for economic revival, including an interest rate cut by the central bank, supplementing other recently introduced stimulus initiatives.
In Australia, the stock market is trading significantly higher on Monday, continuing gains from the previous two sessions despite the mixed cues from Wall Street. The benchmark S&P/ASX 200 index is well above the 8,200.00 mark, hitting new all-time highs due to broad-based sector gains led by iron ore miners and energy stocks, driven by a rise in commodity prices.
The S&P/ASX 200 Index climbed 55.70 points or 0.68 percent to 8,267.90, after reaching an all-time high of 8,285.20 earlier. Similarly, the broader All Ordinaries Index rose by 57.90 points or 0.68 percent to 8,534.70. Australian stocks had edged higher on Friday.
In the mining sector, major players like Rio Tinto and BHP Group saw increases of more than 1 percent each, while Mineral Resources gained nearly 2 percent, and Fortescue Metals advanced over 3 percent. Most oil stocks were higher, with Santos gaining more than 1 percent, Woodside Energy climbing almost 3 percent, Origin Energy rising nearly 1 percent, and Beach Energy adding almost 2 percent.
For tech stocks, WiseTech Global rose by more than 1 percent, Block (Afterpay's owner) increased 0.3 percent, Zip advanced almost 2 percent, and Appen added nearly 1 percent, though Xero edged down by 0.5 percent.
Gold mining companies experienced losses. Evolution Mining declined by more than 2 percent, Resolute Mining fell by over 3 percent, Newmont slipped more than 3 percent, and Northern Star Resources and Gold Road Resources both dipped by more than 1 percent each.
Among the major banks, Commonwealth Bank and National Australia Bank each gained nearly 1 percent, while ANZ Banking and Westpac edged up between 0.2 to 0.5 percent each.
Star Entertainment shares jumped nearly 15 percent, recovering from a 44 percent plunge on Friday.
Economically, private sector credit in Australia rose 0.5 percent month-on-month in August, as reported by the Reserve Bank of Australia on Monday, aligning with expectations and consistent with the previous month’s growth. On a yearly basis, credit increased 5.7 percent in August. Housing credit was up 0.4 percent month-on-month and 5.0 percent year-on-year, personal credit increased 0.1 percent month-on-month and 2.5 percent year-on-year, and business credit rose by 0.7 percent month-on-month and 7.7 percent year-on-year. Broad money grew by 0.4 percent month-on-month and 5.5 percent year-on-year.
The Australian dollar is trading at $0.692 on Monday.
In Japan, the stock market experienced a sharp drop on Monday, erasing gains from the previous two sessions. The benchmark Nikkei 225 index plunged more than 4 percent to below the 38,000 level, influenced by mixed cues from Wall Street on Friday. Losses were widespread across most sectors, with significant declines among index heavyweights, exporters, and technology stocks, as traders reacted to the election outcomes. Financial stocks remained the only positive aspect.
The Nikkei 225 Index concluded the morning session at 37,980.34, down 1,849.22 points or 4.6 percent, dipping to a low of 37,928.72 earlier. Japanese shares had ended sharply higher on Friday.
Major market players such as SoftBank Group and Fast Retailing (Uniqlo operator) experienced more than 6 percent and 2 percent losses, respectively. Automakers Honda and Toyota dropped by more than 6 percent and nearly 7 percent, respectively.
In the technology sector, Screen Holdings declined by almost 6 percent, Advantest by over 5 percent, and Tokyo Electron by more than 6 percent.
Among financial institutions, Sumitomo Mitsui Financial gained over 4 percent, Mitsubishi UFJ Financial added more than 2 percent, and Mizuho Financial surged by over 5 percent.
Major exporters faced declines, with Canon dropping almost 6 percent, Mitsubishi Electric slipping more than 5 percent, Panasonic down by over 3 percent, and Sony declining by more than 3 percent.Isetan Mitsukoshi experienced a dramatic decline of 11.5%, with Lasertec also plunging over 9%. J. Front Retailing, Sumitomo Realty & Development, and Mitsui Fudosan each saw nearly a 9% drop. Taiyo Yuden and Mitsubishi Estate both slipped over 8%, while Tokyo Electric Power and Tokyo Tatemono Subaru registered losses close to 8%. TDK, Suzuki Motor, and Nomura Holdings all decreased by more than 7%, and Mazda Motor alongside Nitto Denko was down nearly 7%.
On the other hand, Resona Holdings surged nearly 6%, and Concordia Financial Group gained over 3%. Chiba Bank, DeNA, and Shizuoka Financial each added almost 3%.
In economic updates, Japan's industrial production fell by a seasonally adjusted 3.3% month-on-month in August, according to the Ministry of Economy, Trade and Industry (METI). This decline exceeded expectations, which had forecast a 0.5% drop following a 3.1% rise in July. Year-over-year, output slumped by 4.9%. METI projects industrial production to increase by 2.0% in September and 6.1% in October.
Additionally, Japan's retail sales grew by 0.8% month-on-month in August, seasonally adjusted, totaling 13.772 trillion yen. This was an improvement from July's 0.2% rise and June's 0.6% gain. Year-over-year, retail sales increased by 2.8%, exceeding estimates of 2.6% and up from the previous month's 2.7% rise.
In currency trading, the U.S. dollar was trading in the lower 142 yen range on Monday.
Elsewhere in Asia, China's market surged by 5.5%, and Hong Kong increased by 1.9%. New Zealand and Singapore posted modest gains of 0.2% and 0.1% respectively. In contrast, South Korea, Malaysia, Taiwan, and Indonesia faced declines ranging between 0.2% and 1.3%.
On Wall Street, Friday saw a mixed performance. The Dow moved upward, achieving a new record closing high, while the Nasdaq and S&P 500 both lost ground. The Dow ended the day up 137.89 points, or 0.3%, at 42,313.00. The Nasdaq dropped 70.70 points, or 0.4%, to 18,119.59, and the S&P 500 edged down by 7.20 points, or 0.1%, to 5,738.17.
European markets also showed positive movement. The German DAX Index rose by 1.2%, the French CAC 40 Index climbed by 0.6%, and the U.K.'s FTSE 100 Index increased by 0.4%.
Crude oil prices closed higher on Friday, buoyed by additional stimulus measures from the Chinese government which alleviated concerns about demand. West Texas Intermediate Crude oil futures for November settled at $68.18 a barrel, up by $0.51.
