Asian Stocks Surge as U.S. Payrolls Data Boosts Sentiment

Asian stocks rose on Monday, led by Japanese stocks, as strong U.S. payrolls data alleviated fears of an economic slowdown. Additionally, hopes for more stimulus measures in China also supported market sentiment.

Regional stocks were positively influenced by a rally on Wall Street, following unexpectedly robust nonfarm payrolls data. This not only eased recession fears but also moderated expectations for sharp interest rate cuts.

U.S. stock index futures saw slight increases during Asian trading hours.

Limited Volumes Due to Holiday

Asian trading volumes were somewhat restrained by China’s Golden Week holiday. However, Chinese markets are anticipated to experience significant gains when trading resumes on Tuesday, buoyed by ongoing optimism surrounding potential stimulus measures in the nation.

Japanese Stocks Lead Gains Amid Yen Decline

Japan’s Nikkei 225 and TOPIX indexes emerged as the leading performers in Asia on Monday, with gains between 1.8% and 2%. This rally is linked to the declining value of the yen and growing skepticism regarding the Bank of Japan’s capacity for further interest rate increases.

7-Eleven owner Seven & i Holdings Co., Ltd. (TYO:3382) rallied by over 3% after reports of plans to sell a stake in its supermarket unit, ahead of a much-anticipated public listing.

Reports also suggested that Canada’s Alimentation Couche Tard Inc (TSX:ATD) secured backing from Quebec’s public pension fund for a takeover bid for Seven & i after an initial offer was rejected.

Hong Kong Stocks Gain Amid China Stimulus Speculation

The Hang Seng index in Hong Kong rose by 0.6%, continuing recent gains fueled by optimism over additional Chinese stimulus, enticing investors back into undervalued mainland stocks.

Mainland Chinese markets are set to reopen on Tuesday post-Golden Week, with expectations of significant gains. China’s top economic planner will hold a briefing on Tuesday to discuss more stimulus measures following strong actions taken in late September.

These initiatives had propelled gains in the Shanghai Shenzhen CSI 300 and the Shanghai Composite indexes, helping them rebound from near eight-month lows.

Overall optimism regarding China positively impacted broader Asian markets, with South Korea’s KOSPI climbing 0.8% and Australia’s ASX 200 adding 0.5%.

Futures for India’s Nifty 50 index indicated a muted opening following a decline from its record highs in September.

Beyond China, trader focus this week will also be on multiple addresses by U.S. Federal Reserve officials and consumer inflation data from the United States, with expectations for a 50 basis point rate cut by the Fed in November being reduced, as indicated by CME Fedwatch.