ASIA MARKETS: Chinese Stocks Rise After Weeklong Holiday

By Kenan Machado Features Dow Jones Newswires

Hong Kong pulls back after last week's gains; Nikkei closed

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After global stock gains last week, the Asia Pacific region started Monday on an upbeat note, led by buying in China after a weeklong holiday there.

In the first action following Golden Week, the Shanghai and Shenzhen composite indexes, which have lagged behind the double-digit gains seen in much of the region this year, both rose more than 1%.

Some were anticipating bigger Monday stock gains in China considering the 5% jump in an index of Hong Kong-traded Chinese stocks last week. That followed the People's Bank of China saying it would ease some reserve requirements if lending targets for financing to smaller businesses were met.

Hong Kong stocks, however, fell modestly after hitting 10-year highs Friday. The Hang Seng Index was recently down 0.2%.

The weakness came amid declines between 2% and 4% for some Chinese property developers, trimming some of their 2017 gains. Data show just 78 new units were contracted in Beijing during the Golden Week holiday, a 64% slump from a year earlier and the least since 2005.

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A modest pullback in Hong Kong stocks overall was to be expected, with Chinese markets reopening and some southbound flows returning to the mainland, said Ivan Ip, a stock strategist at UOB Group in Hong Kong.

Last week's broad market gains came with muted volume, which should continue Monday with markets in Japan and South Korea offline for holidays.

Meanwhile, Australian stocks built on Friday's rebound. After notching its best day since mid-July to end last week, the S&P/ASX 200 rose a further 0.8% Monday, with the country's big banks up some 1% and miner Rio Tinto (RIO) climbing 1.6% to a 3 1/2 -year high.

And New Zealand's stock benchmark rose 0.5%, putting it on pace for a fifth-straight record closing high and rising above the 8,000 level for the first time.

The positive moves in Asian trading came despite reports in North Korean state media that leader Kim Jong Un had defended his nuclear-weapons program in a weekend speech. President Donald Trump also tweeted Saturday that "only one thing will work" to rein in Pyongyang's nuclear ambitions, without elaborating.

"Markets have really brushed aside these comments," said Shane Chanel, an equities adviser at ASR Wealth.

Gold futures, however, rose 0.6% in Asia, even as the dollar was essentially flat. Oil was slightly higher after falling more than 2% during Friday's global session.

(END) Dow Jones Newswires

October 08, 2017 23:24 ET (03:24 GMT)