Asian stocks trade mixed, China stocks lead gains on stimulus measures

• Asian stocks traded mixed on Monday.
• Chinese stocks closed sharply higher due to Beijing’s stimulus measures.
• The Nikkei fell more than 4.80% after Ishiba won the LDP election.

Asian stock markets are trading mixed on Monday. Chinese stocks lead gains on more policy moves in China, while concerns that Japan’s new prime minister favors interest rate normalization weigh on Japanese stocks.

Traders continue to react to additional stimulus measures from the People’s Bank of China (PBoC) to boost growth in the world’s second-largest economy. Meanwhile, China’s Shanghai Composite rose 8.75% to 3,357.20. Meanwhile, the Shenzhen Component rose 10.88% to 10,550, and the Hang Seng Index rose 3.97% to 21,450.

Data released on Monday showed China’s NBS manufacturing Purchasing Managers’ Index (PMI) rose to 49.8 in September from 49.1 in August, above the market consensus of 49.5 in the reported month. The non-manufacturing PMI fell to 50.0 in September versus August’s figure of 50.3 and estimates of 50.4. Additionally, the Caixin Manufacturing PMI fell to 49.3 in September after reporting 50.4 in August. Finally, China’s Caixin services PMI fell sharply to 50.3 in September from 51.6 in August.

Japan’s main indices face a sell-off the day after the prime minister’s election, with the Nikkei 225 falling 4.80% to 37,919, while the broad-based Topix fell 3.63% to 2,641. Shigeru Ishiba said Japan’s monetary policy needs to be normalized and the tax on financial income should be increased.

On the Indian front, the Nifty 50 index fell 1.02% to 25,912 and the BSE Sensex 30 fell 1.12% to 84,630. The Indian rupee has remained largely stable against the USD in the current calendar year (CY 2024), depreciating only 0.59% so far.

On Friday, Chief Economic Advisor (CEA) V Anantha Nageswaran noted that the Indian economy is projected to grow at a rate of 6.5-7.0% in the current fiscal year on a steady-state basis.