Most Asian stocks moved higher on Monday as technology shares rebounded from steep losses last week. Investors, however, stayed cautious ahead of central bank meetings in Australia and India.
Japanese markets lagged as a stronger yen weighed on exporters, while Indian stocks attempted to recover from outsized declines in the previous week.
Regional sentiment tracked Wall Street’s modest gains on Friday. In-line U.S. inflation data supported bets for more Federal Reserve rate cuts. Still, fears of a potential U.S. government shutdown and fresh tariff announcements limited optimism. S&P 500 Futures rose 0.3% in Asian trade.
Australia upbeat ahead of RBA decision
Australia’s ASX 200 climbed 0.8% on Monday, driven by gains in bank and gold stocks. Investors are awaiting the outcome of the Reserve Bank of Australia’s two-day meeting, set to conclude on Tuesday.
The RBA is widely expected to hold rates steady, though analysts see a possible 25-basis-point cut in November, taking the policy rate to 3.35% for an extended period. Governor Michele Bullock is also expected to maintain a data-driven approach to future easing.
Recent data showed inflation ticking higher in Australia, curbing bets on further rate hikes and keeping the central bank’s focus on balancing growth with price stability.
Tech rebound leads Asia; Japan underperforms
South Korea’s KOSPI and Hong Kong’s Hang Seng index led regional gains, rising 1.1% and 1.5%. Tech stocks staged a rebound after heavy losses last week, which were sparked by concerns over the artificial intelligence trade and U.S. restrictions on semiconductor imports.
SK Hynix jumped 3.7% in Seoul, while in Hong Kong, BYD rose 1.5% on reports it expects exports to make up 20% of sales in 2025. Tech stocks were also supported by falling U.S. Treasury yields and stable PCE inflation data, which bolstered Fed rate-cut expectations.
In China, the CSI 300 gained 0.6%, while the Shanghai Composite edged 0.1% higher. Singapore’s Straits Times index rose 0.2%.
Japan’s Nikkei 225 and TOPIX fell 1.5% and 0.7%, pressured by yen strength. A softer U.S. dollar and speculation over a potential Bank of Japan rate hike supported the currency, weighing on exporters.
India rebounds as RBI meeting approaches
India’s Nifty 50 index rose 0.5%, recovering from last week’s losses. The Reserve Bank of India will meet later this week and is expected to hold its benchmark rate steady while trimming its cash reserve ratio.
The RBI faces mounting pressure to deliver more easing as the economy struggles under a 50% U.S. import tariff. New Delhi introduced tax cuts in September to counter the impact of U.S. trade measures.
