Asian Shares Mostly Higher After Wall Street Near Records; China Data Spur Caution
Markets rose across the region Monday as investors priced in potential U.S. rate cuts, while weak Chinese August data and tariff concerns kept some caution in play.
Asian stock markets were mostly higher Monday after Wall Street finished the previous week near record levels, with gains concentrated in Hong Kong and South Korea while Australia slipped and Japan observed a holiday.
Hong Kong's Hang Seng rose 0.4% to 26,505.18, and the Shanghai Composite edged up 0.2% to 3,878.57. South Korea's Kospi gained 0.4% to 3,409.94, while Australia's S&P/ASX 200 lost 0.3% to 8,836.50. Stock trading in Japan was closed for a national holiday.
The regional lift followed a mixed Washington week for U.S. equities: the S&P 500 finished Friday off its all-time high by a fraction, the Dow Jones Industrial Average fell, and the Nasdaq rose. Investors have increasingly priced in the prospect of the Federal Reserve cutting its main interest rate at its meeting next week, a factor market strategists said has been underpinning the recent rallies. Analysts cautioned that a failure by the Fed to deliver cuts could prompt a pullback.
Concerns about the health of China's economy added a counterweight to optimism. Official August data showed retail sales rose 3.4% year over year and factory output increased 5.2%, figures that some analysts described as insufficient to signal a durable pickup. "The underlying flow is shifting. For years, Beijing leaned on exports as the carry trade that kept growth rolling even as property cracked. But with Trump’s tariffs slicing through supply chains, that leg of the trade is gone," said Stephen Innes, managing partner at SPI Asset Management.
In the United States, benchmark U.S. crude rose 42 cents to $63.11 a barrel on Friday, while Brent crude added 41 cents to $67.40 a barrel. In fixed income, the yield on the 10-year Treasury recovered some of its earlier drop, rising to 4.06% from 4.01% late Thursday.
Currency moves were modest: the U.S. dollar inched down to 147.45 Japanese yen from 147.65, and the euro traded at about $1.1730, little changed from late-week levels.
Market participants said the coming days and the outcome of next week's Fed meeting will be key to near-term direction. For now, expectations of easing monetary policy have supported asset prices, even as uneven economic data and trade-related headwinds kept some investors cautious.