Asian Stocks Rise as Positive Jobs Report Lifts Spirit – Asia Market Wrap

Asian equities rose as stronger-than-expected US payroll data demonstrated the strength of the world’s largest economy and improved investor confidence.

Equity benchmarks increased across the region, while US 10-year rates rose to just shy of the important 4% level, as investors reduced their bets on significant Fed interest rate reduction. Asian currencies dropped against the Dollar, with Indonesia’s Rupiah plunging for the sixth consecutive day. Bank Indonesia indicated it was ready to intervene to sustain the exchange rate.

Trading is being shaped by signs of US economic resilience, after employers added the most jobs in six months in September. Wagers on a ‘no landing’ scenario – where growth momentum remains intact and inflation reignites – stand to boost the Dollar while triggering a drop in haven assets. A gauge of Chinese stocks in Hong Kong jumped to the highest level in more than two years before mainland China markets reopen Tuesday after a week-long holiday.

Chinese officials have launched a number of stimulus measures in the last two weeks. The National Development and Reform Commission said over the weekend that it will host a briefing on Tuesday on executing incremental economic reforms.

Goldman Sachs raised Chinese stocks to overweight, with strategists predicting another 15-to-20% upside even after the rise that began in late September. Still, there have been a number of false dawns, and corporations such as Invesco, JPMorgan and HSBC remain sceptical about the resurgence.