Investing.com — Most Asian stocks surged on Monday as the Federal Reserve approaches a meeting for further clues on interest rate cuts, with the hard-hit technology sector leading the gains.
However, with further key economic data due to be released this week, sentiment towards China showed little sign of improvement and the Chinese market continued to underperform its regional peers.
A strong Wall Street close helped Asian stocks, as signs of easing inflation boosted expectations that the Fed will eventually cut interest rates this year, which also helped send U.S. stock index futures higher in Asian markets.
The Fed is due to finish a two-day meeting on Wednesday, but any signals about when it might start cutting rates will be closely watched, given upbeat comments from Fed officials.
Asian tech stocks continue to recover
Tech-heavy Asian bourses continued to lead the way, riding on a long rally in technology stocks, with Japan’s index up 2.2%, while South Korea’s and Hong Kong’s indexes added about 1% each.
Technology stocks saw some bargain-hunting after being hit hard by profit-taking over the past two weeks, while hopes of interest rate cuts prompted investors to move money into economically sensitive sectors.
However, investors appear to be moving back into the space ahead of several key earnings reports this week. US tech giants Microsoft (NASDAQ:), Apple Inc (NASDAQ:) and Meta Platforms Inc (NASDAQ:) are due to report their second-quarter results in the coming days, which could provide further clues about the industry and artificial intelligence.
Chinese stocks slump with few positive signs
Chinese stocks and the Chinese yuan index fell 0.4% and 0.1%, respectively, and remain near five-month lows, with negative sentiment towards China doing little to ease.
The Chinese market saw an extended sell-off amid concerns that the country’s economic recovery would slow following a series of weak data through July.
Political uncertainty in the United States is also weighing on the Chinese market, with investors particularly unsure how the next U.S. administration will deal with Beijing.
The focus this week will be on domestic data for July, which will provide further clues on business activity.
Asian markets rose across the board, with Australia up 0.8% and Japan up 1.9%.
Indian stock indexes are off to a positive start and are set to extend gains after surging to record highs last week.
