Asian Shares Rise On Reduced Expectations Of Rate Hikes In The U.S.

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Asian shares were up on Monday save for China where a crackdown on speculative trading appeared to have kept some investors from the markets. The gain in Asian stocks comes at a time when fresh U.S. GDP data has shown that the economy grew only 1.2% in the second quarter. But economists on the average expected the GDP to expand at least 2.6% in the quarter.

A weaker GDP growth makes a case of a more gradual path to interest rate hike by the Federal Reserve. But delayed rollout of higher interest rates in the U.S. is seen as a kind of monetary easing elsewhere.

Asian investors also appeared to bet that the meeting of policy official of the Bank of England, the Reserve Bank of Australia and the Bank of Thailand in the coming days would see interest rates reduced, thus adding to the monetary easing efforts. Such efforts should help global economies avert a recession after the U.K. stunned the world with its decision to pull out of the European Union in the Brexit vote.

How Asian equities moved

In Tokyo, the Nikkei 225 (INDEXNIKKEI:NI225) rose 0.40% on Monday. The gains in the index were supported by gains in Japan’s Communication, Banking and Precision Instruments sectors.

A weaker yen also appeared to have provided a bargain opportunity for foreign investors to enter Tokyo stocks. The USDJPY rose 0.49, while EURJPY jumped 0.53%.

Shares in Taiwan also rose with the Taiwan Weighted finish up 1.07% to hit a new one-year high mark. Gains in Taiwanese equities were driven by gains in the country’s Optoelectronic, Semiconductor and Electricity sectors.

In South Korea, the KOSPI was up 0.67%.

China’s trading mixed

But equity trading in China was mixed as the larger Shanghai Composite fell 0.88% after shedding 26.17 points, while the smaller HANG SENG INDEX (INDEXHANGSENG:HIS) gained 1.1%. Escalation of regulatory crackdown on speculative trading is seen as responsible for the mixed performance in Chinese equities.

In Australia, the S&P/ASX 200 gained 0.38% to rise to a new 6-month high mark, driven by gains in the country’s Resources, Energy and Gold sectors.

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