Asian stock markets saw positive momentum on Monday, with Hong Kong’s markets leading the way as investors eagerly awaited further policy directions from the incoming US administration under President-elect Donald Trump.
Hong Kong’s Hang Seng Index (HSI) rose sharply during the trading day, reaching its highest level since December 31, before paring some of its gains. By the end of the day, the HSI was up 1.76%, driven primarily by strong performances from consumer cyclical and healthcare stocks. The index’s rally was a bright spot in the region, contributing to broader gains across Asia-Pacific markets.
Mainland China’s CSI 300 also saw a modest rise, adding 0.45% to close at 3,829.68. This came after the People’s Bank of China kept its benchmark lending rates unchanged, holding the 1-year loan prime rate (LPR) at 3.1% and the 5-year LPR at 3.6%. Meanwhile, the yuan showed slight strength, with the offshore yuan trading at 7.3345 per U.S. dollar and the onshore yuan at 7.323.
In Japan, the Nikkei 225 climbed 1.17% to end at 38,902.50, and the Topix Index added 1.19%, closing at 2,711.27. These gains were supported by anticipation of possible policy changes and rate hikes, as the Bank of Japan prepares for its upcoming policy meeting later this week. On the other hand, South Korea’s Kospi index slipped 0.14%, while the Kosdaq rose 0.41%, reflecting a mixed sentiment in the South Korean market.
Australia’s S&P/ASX 200 posted a 0.45% gain, closing at 8,347.40. Across the region, sentiment was generally positive, buoyed by optimistic economic data from Malaysia, where exports surged 16.9% year-on-year in December, far exceeding expectations. Investors are also keeping a close eye on the upcoming central bank meetings in Asia, including those of Malaysia’s central bank, the Bank of Japan, and Singapore’s Monetary Authority.
As for the US, markets were closed in observance of Martin Luther King Jr. Day, but futures suggested a modestly weaker start for Wall Street on Tuesday. The inauguration of Donald Trump, who is set to take the oath of office later on Monday, is the main event for global investors. Trump’s administration has sparked expectations of significant policy shifts, particularly in areas like trade, tariffs, and regulations, which could have major implications for markets worldwide.
In particular, the Trump administration’s stance on trade remains a key focus. Last week, Trump spoke with Chinese President Xi Jinping about trade and other issues, leaving both sides optimistic about future negotiations. With a potentially more aggressive approach to tariffs on the horizon, analysts are watching closely to see how markets respond to these developments.
With the inauguration in full swing, the immediate effects of Trump’s policy shifts may start to show up in global trade, foreign exchange markets, and in Asian trade on Tuesday. The ongoing shifts in currency values, including a modest rise in the US dollar, reflect the uncertainty and anticipation that typically accompany a new administration’s first moves.
CNBC, Reuters, and Market Watch contributed to this report.
