Asian shares optimistic ahead of Trump’s inauguration; Chinese stocks advance By Investing.com
Investing.com– Most Asian stocks rose on Monday amid some hopes that US President-elect Donald Trump will not adopt as tough anti-China rhetoric as feared when he takes office later in the day.
Regional shares took a positive lead from Wall Street on Friday, as a string of positive bank earnings and rising hopes of a rate cut fueled a strong rally in US stocks.
U.S. stock futures were less bullish in Asian trade on Monday, falling slightly on some caution over Trump. US markets will also be closed on Monday for Martin Luther King Jr. Day.
Asian stocks rise on Trump speculation
Most Asian stocks rose, led by Japanese and Hong Kong stocks. The Japanese and indices strengthened by 1.5 percent each, while the Hong Kong index added 1.6 percent.
Hopes for less harsh rhetoric against China rose after Trump failed to mention his plans for trade tariffs during a victory rally in Washington on Sunday. But the president-elect reiterated plans to crack down on immigration and reduce government oversight of domestic companies.
Fox News Digital reported that Trump planned to sign a record number of executive orders when he takes office on Monday, some of which could still include increasing trade tariffs against China.
The president-elect has promised to impose tariffs of up to 60% on all Chinese imports, while also targeting Mexico and Canada with increased tariffs.
Such a move could potentially disrupt global trade and bode ill for export-oriented economies.
Chinese stocks rise as PBOC keeps rates unchanged
The Chinese and indices rose by 0.8% and 0.5%, respectively.
The People’s Bank of China kept its benchmark key interest rate unchanged as widely expected on Monday, seen as Beijing kept its stimulus powder dry as it sought more clarity on Trump’s plans for trade tariffs.
China is expected to apply even more aggressive stimulus measures to neutralize economic problems caused by potential tariff increases. Trump’s tariffs are expected to put even more pressure on China’s economy, which is struggling with persistent disinflation and a prolonged slump in the housing market.
Still, data released last week showed some progress in China’s economy, after Beijing announced its most aggressive round of stimulus measures yet in late 2024.
Chinese markets were also buoyed by a recent rally in chipmaker stocks, as tighter US export controls in the sector fueled bets that local foundries will benefit from increased domestic demand.
Broader Asian markets were mostly higher on Monday, although gains were largely capped by pre-Trump caution. In addition to the inauguration of the US president, the focus this week is also on a number of key economic readings, as well as the Bank of Japan meeting.
Australia rose 0.2%, while India’s index pointed to a slightly positive open, after the index posted a series of big losses last week.
Singapore’s index lagged behind, falling 0.3%, while South Korea’s index traded sideways. Any disruptions in global trade will significantly affect both economies, given their dependence on exports.
