Asian stocks advance on Chinese optimism

(RTTNews) – Asian stocks ended broadly higher on Monday as investors reacted to reports of a possible reduction in US tariffs on Chinese goods, the easing of Covid-19 restrictions in Beijing and of improving Caixin Services PMI data for May from China.

China’s Shanghai Composite Index rose 1.28% to 3,236.37 after a survey of private companies showed service activity in China contracted for the third consecutive month in May, but signaled a slow recovery for the world’s second-largest economy.

Hong Kong’s Hang Seng index climbed 2.71% to 21,653.90 as virus controls on Shanghai and other major cities were lifted.

Japan’s Nikkei average rose 0.56% to 27,915.89, marking a two-month closing high. Energy stocks top the list of winners as oil prices climbed after Saudi Arabia raised prices sharply on its crude sales in July.

Idemitsu Kosan jumped 5.4% and ENEOS 4.8%. Airline ANA Holdings gained 2.9% and travel agent HIS gained 3.3%, supported by reports that the Japanese government was planning to restart its “Go To Travel” subsidy program as early as this month- this.

Markets in South Korea and New Zealand were closed for the holidays. Australian stocks ended lower as investors anticipated the RBA’s policy meeting on Tuesday, where the central bank is expected to raise the cash rate by 25 to 40 basis points.

The benchmark S&P/ASX 200 fell 0.45% to 7,206.30 while the broader All Ordinaries index ended down 0.53% to 7,433.10. Tech stocks paced the declines, with Block losing as much as 3.2%.

The index jumped 2% to a more than two-year high after the gas producer took steps to boost domestic gas supplies.

US stocks fell sharply on Friday to end the week lower as a stronger-than-expected jobs report dashed any hopes the Fed would consider a pause in rate hikes after the June/July hikes.

Data showed non-farm payroll employment jumped 390,000 jobs in May after jumping an upwardly revised 436,000 jobs in April. Economists expected employment to rise by about 325,000 jobs. The unemployment rate remained unchanged at 3.6%.

The tech-heavy Nasdaq Composite plunged as much as 2.5%, while the S&P 500 lost 1.6% and the Dow Jones lost 1.1%.

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