Investing in Asian Stocks

Most Asian stocks rose slightly on Monday amid persistent cheer over lower interest rates, while Australian markets lagged, impacted by major retail stocks falling sharply due to an antitrust lawsuit.

Market Overview

Chinese markets advanced after the People’s Bank of China (PBOC) cut a short-term lending rate, although overall gains were limited. Regional trading volumes were hindered by a market holiday in Japan. A weak close on Wall Street last Friday contributed to mixed cues, though U.S. stock index futures rose in Asian trade.

The sentiment was buoyed by strong gains from the prior week, following an interest rate cut by the Federal Reserve, which initiated an easing cycle. Markets were looking for key signals from the U.S. with several officials set to speak this week and key inflation data expected.

Chinese Markets Rise After Repo Rate Cut

China’s Shanghai Shenzhen CSI 300 index and Shanghai Composite index rose by 0.5% and 0.4%, respectively, while Hong Kong’s Hang Seng index increased by 0.7%.

The PBOC lowered its 14-day reverse repo rate to 1.85% from 1.95%, further easing local monetary conditions to support economic growth. This decision followed a disappointment just days prior when the PBOC left its benchmark loan prime rate unchanged. Chinese indexes are still trading above seven-month lows reached earlier in September, with investors urging Beijing to introduce additional stimulus measures amid weak economic signals.

Australian Stocks Hit by Retailer Losses

Australia’s ASX 200 was the worst performer in Asia, dropping by 0.6% from record highs. The biggest losses were from supermarket giants Woolworths Ltd and Coles Group Ltd, which fell between 3% and 4% following a lawsuit from Australia’s competition regulator accusing them of misleading customers over discounts.

Sentiment towards Australia remained weak prior to the Reserve Bank of Australia (RBA) meeting on Tuesday. Although no interest rate hike is anticipated, a hawkish tone is expected due to ongoing strength in the labor market and persistent inflation.

Broader Asian markets drifted higher, buoyed by lower interest rates. Nikkei 225 Futures rose by 0.9% as local markets were closed for a holiday. South Korea’s KOSPI increased by 0.1%, while futures for India’s Nifty 50 index indicated a positive opening, now nearing record highs at 26,000 points.