Asia stocks rise on China stimulus cheer; tariff, recession jitters persist

Asian stocks rose on Monday tracking optimism over the Chinese economy after Beijing outlined targeted measures to boost spending, although persistent concerns over a U.S.-led trade war kept gains limited.

Regional markets also took a positive lead-in from a Friday rebound on Wall Street, although the rebound appeared to have petered out with U.S. stock index futures falling in Asian trade.

Persistent concerns over U.S. trade tariffs and slowing growth undermined overall risk appetite, as did anticipation of a barrage of key central bank meetings this week, particularly the Federal Reserve and the Bank of Japan.

Barring China, most Asian markets were nursing steep losses over the past month, amid heightened concerns over U.S. trade tariffs and a potential recession.

Chinese stocks buoyed by more stimulus cues
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose marginally, while Hong Kong’s Hang Seng index surged as much as 1%.

Sentiment towards the country was boosted chiefly by Beijing unveiling “comprehensive” measures aimed at boosting domestic consumption and driving up economic growth.

A report from the State Council outlined a plan to strengthen consumer demand by increasing wages, offering more subsidies and also increasing social welfare.

The planned measures are more promises from Beijing to boost sluggish private spending- which has been a major point of pressure on the Chinese economy over the past four years.

Data on Monday showed Chinese industrial production blazed past expectations in the first two months of 2025, while retail sales grew as expected. Fixed asset investment grew more than expected, while China’s unemployment rate unexpectedly rose.

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Optimism over more Chinese stimulus and the country’s artificial intelligence capabilities drove a stellar rally in local markets so far in 2025, although a bulk of buying was directed towards Hong Kong.

A key Chinese loan prime rate decision is due later this week.

Japan’s Nikkei surges with BOJ in focus
Japan’s Nikkei 225 index added 1.1%, while the broader TOPIX index rose 1.2%.

Focus this week is squarely on a BOJ meeting, with the central bank widely expected to keep interest rates steady at its conclusion on Wednesday.

But investors will be watching for any commentary on the BOJ’s plans to hike interest further this year, amid signs of sticky Japanese inflation, rising wages, and positive economic growth.

Broader Asian markets took positive cues from China, with Australia’s ASX 200 index rising 0.6%. But the index did trim some gains after Treasurer Jim Chalmers flagged higher inflation and slower economic growth due to the impact of Cyclone Alfred.

Singapore’s Straits Times index rose 0.7% following mixed export data. The country’s key non-oil exports grew more than expected in February from the prior month, but year-on-year growth still missed expectations.

South Korea’s KOSPI rose 1.4% on bargain buying into major technology stocks. But sentiment towards the country remained strained before a key court ruling on impeached President Yoon Suk Yeol over his attempt to impose martial law in December. Anticipation of the decision- which is due this week- sparked mass rallies across South Korea.

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Futures for India’s Nifty 50 index pointed to a mildly positive open, as the index nursed sustained losses since late-2024. Indian wholesale inflation data is due later on Monday.