Asian stocks mostly advanced on Monday, led by gains in China and Hong Kong as investors extended the recent risk-on move while awaiting fresh Chinese economic data and monitoring developments around the Strait of Hormuz.
The lack of progress toward a peace deal has kept pressure on oil markets, with tanker traffic through the strategic Strait of Hormuz still largely halted. Iran has urged the U.S. to “accept defeat,” while President Donald Trump has warned Americans to prepare for higher gasoline prices as the conflict continues.
In Asian trading, Nasdaq 100 Futures gained 0.5%, while S&P 500 Futures rose 0.2% after weaker U.S. economic data last week continued to reduce expectations for an imminent Federal Reserve rate hike.
U.S. retail sales fell 0.6% in July, marking the largest decline in more than a year. Markets now see roughly a one-in-four chance of a September Fed hike, down from around 50% a week earlier. Two-year Treasury yields declined to about 4.2%.
Japan GDP Disappoints as Technology Stocks Gain
Japan’s Nikkei 225 increased 0.7%, while the broader TOPIX declined 0.3%. China’s Shanghai Shenzhen CSI 300 gained more than 1.3%, the Shanghai Composite rose 1%, and Hong Kong’s Hang Seng advanced nearly 2%.
South Korea’s markets were closed for a public holiday, while the MSCI Asia Pacific index was broadly unchanged.
Japan’s weaker-than-expected economic data had limited impact on the Nikkei’s gains. The economy expanded at an annualized 1.1% pace in the second quarter, below expectations of 2%, as private consumption declined for the first time in eight quarters and business investment contracted.
Exports provided some support, helped by demand for Japanese hybrid vehicles and semiconductor-related shipments linked to the global artificial intelligence boom.
The weaker growth outlook could give the Bank of Japan more room to delay another rate increase, although persistent inflation and higher import costs remain risks.
Technology stocks were among the strongest performers in Japan. Kioxia Holdings rose 7.6%, LARGAN Precision gained 10%, and TDK added 0.12%.
That strength extended into China, where chip stocks also performed well. Cambricon Technologies climbed 5%, SMIC gained 7.1%, Foxconn Industrial Internet increased 1.4%, and Alibaba rose 1.5%.
Alibaba also drew attention after reports that the company is seeking to sell its gaming arm Lingxi Games in a deal that could value the studio at more than $1.5 billion.
Investors are also positioning ahead of China’s July activity data. Economists expect industrial output growth to slow to 4.8% from 5.3%, while retail sales are forecast to increase 1.5%.
Australia Falls as Earnings Drive Stock Moves
Australia’s S&P/ASX 200 declined 0.5%, with corporate earnings influencing some of the largest individual stock moves.
JB Hi-Fi shares dropped sharply after the retailer reported weaker July sales performance and a softer outlook.
NAB’s cash earnings increased about 2% to A$1.83 billion, but the bank highlighted a significant decline in housing activity, with home-loan applications falling and investor lending particularly weak. Shares declined around 3.5%.
India’s Nifty 50 fell 0.4%, while Singapore’s FTSE Straits Times Singapore index recovered from earlier losses to trade flat.
Oil Markets Remain Under Pressure
Oil remained a source of caution for investors. Brent crude traded near $88.50 per barrel after rising about 6% last week, while U.S. crude was around $82.12.
Tanker traffic through the Strait of Hormuz remained severely disrupted, with Iran and Washington continuing to disagree over conditions for reopening the waterway.
