Shares in Asia rose Monday as investors bet that global central banks would introduce easing measures to encourage economic growth.
Japan’s Nikkei Stock Average NIK, +0.60% ended 0.6% higher at 15,775.80, Australia’s S&P/ASX 200 XJO, +0.67% rose 0.7% to 5,281.80, and Korea’s KospiSEU, +0.40% gained 0.4% to 1,995.30. Hong Kong’s Hang Seng Index HSI, +1.27% rallied 1.3% to 21,059.20, and China’s Shanghai Composite Index SHCOMP, +1.91% gained 1.9% to 2,988.60.
Investors across the region were buying stocks in the hopes that central banks, in particular the Bank of Japan, would soon loosen policies by cutting interest rates or expanding asset-buying programs, said Gavin Parry, managing director of Parry International Trading.
Such policies would be “equity positive,” he added, as corporate borrowing costs become lower when liquidity enters the financial system.
Investor hopes for looser monetary policies were fully apparent in China on Monday. Domestic stock investors were betting that the U.S. Federal Reserve would hold off on raising interest rates at all this year, instead of doing so twice as officials had projected, analysts said. That could keep the U.S. dollar from strengthening rapidly, and generate demand for commodities stocks, which are priced in the greenback.
In a sign of that expected demand, China’s 000909, +3.50% subindex surged 3.5%. At least a dozen stocks, including Inner Mongolia Xingye Mining Co. 000426, +10.04% and nonferrous metals producer Shenzhen Zhongjin Lingnan Nonfemet Co. 000060, +10.04% rose 10%, hitting their daily price-movement limit.
In Hong Kong, property stocks that were perceived to be undervalued led gains. Investors focused on a report last Friday from Daiwa Capital Markets that argued shares of Hong Kong-focused real-estate developers are collectively worth $200 billion more than they are priced by the market.
Hong Kong’s largest home builder by market cap, Sun Hung Kai Properties Ltd.0016, +3.98% rose 4%, while Cheung Kong Property Holdings Ltd. 1113, +4.24% jumped 4.2%.