ASX futures were tipped 22 points or 0.3pc higher at 7343 as of 8.00 am AEST, indicating a positive start to trade.
Overseas, the Shanghai composite gained 0.6% after the Chinese central bank lowered interest rates as the world’s second-largest economy logged its slowest GDP growth in 18 months. Pulling back in Hong Kong, shares fell 0.7%, while Japan’s Nikkei 225 was up 0.7%. In London, the FTSE 100 rose 0.9% as GlaxoSmithKline rejected a GBP50 billion proposal from Unilever to buy its consumer products division. The pan-European STOXX 600 rose 0.7%.
The S&P/ASX 200 rose 0.3% to 7417.3 on Monday, despite weakness in mining stocks, to regain some of last week’s losses. The gains were led by retail, energy and tech sectors. Beaten-down travel stocks Webjet and Flight Centre recovered some of their recent Covid losses, rising 2.8% and 3.9%, respectively, helping the consumer discretionary sector rise 2.2%.
Even Santos, Woodside and Beach Energy enjoyed gains of between 1.0% and 3.9% on higher oil prices and tech stocks tracked Friday’s bounce from their US cousins. In bond markets the Australian 10-year bond yield extended its advance to 1.91%. United States bond markets were closed for a public holiday.
The Australian dollar was fetching 72.10 US cents at 8.00 am AEST, compared with the previous close of 72.06. The WSJ Dollar Index, which tracks the US dollar against 16 other currencies, inched up to 89.27.
Asia
Chinese shares also ended higher, with software and telecom companies driving the gain. The Chinese central bank’s decision to cut two of its key interest rates today is a signal of more room for monetary easing, and investment opportunities could be in industries that benefit from policy support, such as the digital economy and 5G networks, according to Sealand Securities. Yonyou Network climbed 8.9 percent, Sangfor Technologies gained 8.3 percent and the telecom equipment firm ZTE Corp. increased 3.9 percent. The worst performers were China Tourism Group Duty Free which was down 5.0% after the company reported preliminary expected numbers for 2021. The Shanghai Composite Index gained 0.6%, the Shenzhen Composite Index increased 1.5% and the ChiNext Price Index gained 1.6%.
Hong Kong stocks closed lower, with the market continuing to sag after a sharp rise through the earlier part of this month. The benchmark Hang Seng Index dipped 0.7%. Property developers and managers weighed on the index after new official data released earlier this week showed another sequential drop in housing prices in December. Country Garden Services tumbled 9.1% and its parent country garden holdings plunged 8.1%. Agile was off 4.6% and Sunac China fell 5.0%. Macau casinos had a bright day, with Sands China up 15% as the big winner. The sector’s rally followed the publication of the new gaming law draft from the city, turning out to be less draconian than investors had feared.
Japanese stocks finished higher, led by advances in energy, auto and electronics shares as the yen fell, although concerns remained about the possible spread of the Omicron variant. Inpex rose 3.1%, Nissan Motor was up 2.4% and Olympus added 3.0%. The Nikkei Stock Average advanced 0.7%. Investors are keeping an eye on Covid-19 infection trends in Japan after the local media said the government was considering measures that may restrict restaurants’ operating hours in Tokyo and three neighboring prefectures.
Europe
Stocks in Europe closed primarily higher as investors maintain an upbeat tone although there is no trading in the US, owing to a public holiday in the US. The pan-European Stoxx Europe 600 gained 0.7 percent, declining about the same amount for the week.
“While European markets have managed to creep higher, those gains will be quickly undone if US traders return with a similarly dour outlook to that seen on Friday,” IG analyst Chris Beauchamp says. “And while US earnings season remains in its early innings and the Federal Reserve has a crucial meeting coming this month there’s still much out there to keep investors from going out on a limb.”
In London, the FTSE 100 soared 0.9% on a wave of blockbuster merger and acquisition news and as China lowered interest rates against a backdrop of slowing growth, AJ Bell investment director Russ Mould said.
“Chinese GDP numbers were not worse than expectation. But the central bank's move to ease rates is mindful of a slowdown in the property market and the impact of tighter restrictions implemented to curb the spread of the Omicron variant of Covid-19,” Mould said.
GlaxoSmithKline, meanwhile, rose 4.1% after the company rejected a GBP50 billion offer from Unilever for its consumer products unit.
North America
US markets were shut following the Martin Luther King Jr. Day public holiday. The heavyweight materials group was the worst performer, down 1.0% on weakness from gold and iron-ore miners.
In commodities, gold futures rose 0.1 per cent to $US 1818.90 a barrel; Brent crude added 0.6% to $US86.54 a barrel; Iron ore was down 2.2% at US$124.00 a tonne.
