Investing.com– Most Asian stocks rose Monday on hopes that U.S. President-elect Donald Trump will not adopt as harsh rhetoric against China as feared when he takes office later in the day.
Regional stocks took a positive lead on Wall Street on Friday, as a string of positive bank earnings and growing hopes for interest rate cuts sparked strong gains in U.S. stocks.
U.S. stock futures were less upbeat on Monday, falling slightly amid caution over Trump. US markets will also be closed on Monday to mark Martin Luther King Jr Day.
Asian stocks rise on Trump speculation
Most Asian stocks rose, with Japanese and Hong Kong stocks leading the way. The Japanese and Hong Kong indices rose 1.5% each, while the Hong Kong index rose 1.6%.
Hopes for less harsh rhetoric against China grew after Trump made no mention of his plans for tariffs during a victory rally in Washington on Sunday. But the president-elect reiterated his intention to crack down on immigration and reduce government oversight of domestic businesses.
Fox News Digital reported that Trump plans to sign a record number of executive orders when he takes office on Monday, some of which could still include increased tariffs against China.
The president-elect had pledged to impose tariffs of up to 60% on all Chinese imports, while also targeting Mexico and Canada with increased tariffs.
Such a move risks disrupting global trade and bodes ill for export-oriented economies.
Chinese stocks rise as PBOC keeps rates unchanged
The China and China indices rose by 0.8% and 0.5%, respectively.
The People’s Bank of China kept its benchmark prime rate unchanged on Monday, as expected, with Beijing keeping its stimulus powder dry while seeking more clarity on Trump’s plans for trade tariffs.
China is expected to deploy even more aggressive stimulus measures to offset economic pain from any potential tariff increases. Trump’s tariffs are expected to put even more pressure on China’s economy as it struggles with persistent disinflation and a prolonged housing crash.
Nonetheless, data released last week showed some improvement in China’s economy, after Beijing released its most aggressive round of stimulus measures yet in late 2024.
Chinese markets were also boosted by recent gains in chipmaking stocks, as tightening U.S. export controls in the sector sparked bets that local foundries would benefit from rising domestic demand .
Broader Asian markets were mostly higher on Monday, although gains were largely limited by caution before Trump. Beyond the US presidential inauguration, the focus this week is also on a series of key economic figures, as well as a meeting of the Bank of Japan.
Australia’s rose 0.2%, while India’s opened slightly positive, after the index posted a series of sharp losses last week.
Singapore’s index lagged, down 0.3 percent, while South Korea’s index moved sideways. Any disruption to global trade is likely to have a significant impact on both economies, given their dependence on exports.
