Stock prices in Asia rose on Monday as stimulus measures in Japan cast a shadow over the news that the economy had shrunk in the previous quarter.
Investors are waiting for the outcome of a virtual meeting between President Joe Biden and Chinese President Xi Jinping.
Benchmarks rose in Tokyo, Sydney, Hong Kong and Seoul, but fell in Shanghai.
Japan reported that the economy shrank in the July-September quarter as pandemic regulations hitting consumer spending became stricter.
On an annual basis, the economy shrank at a rate of 0.3 percent. It shrank 0.8% from the previous quarter.
Prime Minister Fumio Kishida plans to offer a large-scale stimulus package of up to 40 trillion yen ($ 350 billion) this week.
The recent sharp decline in new coronavirus cases has allowed the country to relax restrictions on business and other activities, which, coupled with government spending, are expected to boost a solid recovery in the last quarter of this year. ..
Tokyo’s Nikkei 225 Index rose 0.6% to 29,776. Meanwhile, South Korea’s Kospi surged 1% to 2,999.52. In Australia, the S & P / ASX 200 was up 0.3% to 7,470.10.
The latest data update in China was a mixed bag with higher retail sales and factory output, but sluggish home price and fixed asset investment.
Hong Kong’s Hang Seng Index rose 0.1% to 25,307.34, while the Shanghai Composite Index fell 0.2% to 3,552.74.
In Beijing, a new stock exchange set up to serve entrepreneurs began trading with 81 companies on Monday.
It meets others in the southern cities of Shanghai and Shenzhen. Mainland exchanges are mostly off limits to foreign investors and were established primarily to raise funds for state-owned enterprises. In September, Chinese Communist Party leader Xi Jinping said the Beijing exchange would “establish a key service innovation-oriented position for small and medium-sized enterprises,” which is the ruling party’s private enterprise term.
On Friday, stocks closed higher on Wall Street, but the market still ended in a lower week.
The S & P 500 index rose 0.7% to 4,682.85, but fell 0.3% in the first weekly loss of the benchmark in 6 weeks.
The Dow Jones Industrial Average rose 0.5% to 36,100.31 and the Nasdaq Composite Index rose 1% to 15,860.96. The Dow fell 0.6% that week and the Nasdaq fell 0.7%.
The recent record highs in key indices seem to have come to an end as investors shift their focus from corporate earnings to rising inflation.
Various companies have shown that they have successfully overcome both the summer COVID-19 surge and protracted supply chain problems.
But looking to the future, companies warn that rising raw material costs and supply chain disruptions could put pressure on public finances. Prices for consumer goods and necessities are also rising, raising concerns that people may cut spending and negatively impact economic recovery.
Wall Street will get the latest information on consumer spending on Tuesday, when the Department of Commerce releases its October retail sales report. Some big companies haven’t reported earnings yet, including Home Depot and Wal-Mart, which will report results on Tuesday. Target will report results on Wednesday and Macy’s will report earnings on Thursday.
Also on Monday, US benchmark crude fell 57 cents to $ 80.22 a barrel in electronic trading on the New York Mercantile Exchange. It fell 80 cents to $ 80.79 a barrel on Friday.
Brent crude, the basis of international prices, fell 58 cents to $ 81.59 a barrel.
The dollar fell from 113.97 yen to 113.84 yen. The euro rose from $ 1.1447 to $ 1.1457.
By Elaine Kurtenbach
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