Asian Shares Rally Prior To China Services Data

asian shares rally

On Monday, Asian shares traded higher as investors awaited the release of the Caixin services PMI data in China.

The Shanghai Composite index in China traded 0.76% or 25.44 points to 3,374.39 while the Hang Seng Index in Hong Kong edged slightly lower down by 0.45% to 28,333 during the late afternoon trading as information from the IHS Markit revealed that the private sector in China grew at the slowest rate in the past three months in September.

Stocks in China such as those coming from the automobile sector rallied including Dongfeng Auto and Faw Car which rose 4.63% and 9.16% respectively.

Shares in Hong Kong are down for the first time in the past five days due to market concerns following the city benchmark hovering around a ten-year high as equities in mainland China rallied during the market session after a weeklong holiday. Stocks in Hong Kong like Galaxy Entertainment lot 2.89% while the Wynn Macau lost 3.41%.

MSCI’s broadest index of Asia-Pacific shares outside Japan was only down by 0.1% after recovering by 1.7% last week.

In August, the Caixin composite was down from 52.4 and was down by 51.4 in September due to the small jump in the manufacturing and services output which showed that the two services’ activity expanded at the slowest rate in the past two years.

The S&P/ASX 200 index traded 0.71% higher driven by most gains in its sub-indexes with major mining and gold stocks attributing to most of the gains. Stocks such as Alacer Gold and Rio Tinto traded 3.14% and 1.55% higher respectively. The Australian dollar which is known to react in the past to economic data in China traded lower from having previously traded at $0.7782 earlier to as low as $0.7763. The Mantra Group was among the best performers during the session after it traded 16% higher.

Markets in countries such as Japan, South Korea, and Taiwan were closed for the public holidays resulting to Asian investors shifting their attention to the Chinese market during the day.

Outside Asia, most global shares traded higher during the trading session despite the markets undergoing political or geopolitical concerns. Wall Street stocks were also expected to open higher after trading mostly lower last week. European shares also gained 0.3% after the DAX rallied to an all-time high on an upbeat industrial data. Shares in Spain also gained 0.6% following a decline in government bond yields.

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