Investing.com — Most investors on Monday were hopeful that President-elect Donald Trump would not be as tough on China as feared when he takes office later in the day. Asian stocks rose.
Strongly positive bank earnings and rising expectations for interest rate cuts triggered a big rally in U.S. stocks, with regional stocks gaining positive leads from Wall Street on Friday.
US stock futures were not as strong in Asian trading on Monday, falling slightly amid concerns about President Trump. US markets will also be closed on Monday in observance of Martin Luther King Jr. Day.
Asian stocks rise on President Trump's speculations
Most Asian stocks rose, with Japanese and Hong Kong stocks leading the way. Japan's index and index rose 1.5% each, while Hong Kong's index rose 1.6%.
Hopes were raised that President Trump would ease his tough rhetoric against China after he made no mention of trade tariff plans at his victory lap rally in Washington on Sunday. But the president-elect has reiterated plans to crack down on immigration and reduce government oversight of domestic businesses.
Fox News Digital reported that President Trump is expected to sign a record number of executive orders when he takes office on Monday, including potentially increasing trade tariffs on China.
The president-elect had vowed to impose tariffs of up to 60% on all imports from China, while also increasing tariffs on Mexico and Canada.
Such a move could disrupt global trade and bodes badly for export-driven economies.
Chinese stocks rise as People's Bank keeps interest rates on hold
China's index and index rose 0.8% and 0.5%, respectively.
The People's Bank of China left its benchmark prime loan rate unchanged on Monday, as widely expected, as Beijing seeks clarity on President Trump's trade tariff plans and appears to be holding back on stimulus. are.
China is expected to take more aggressive stimulus measures to offset economic headwinds from potential tariff hikes. President Trump's tariffs are expected to put even more pressure on China's economy, which is grappling with persistent disinflation and a prolonged collapse in the real estate market.
Still, data released last week showed some improvement in China's economy after the Chinese government announced its most aggressive economic stimulus package yet for the second half of 2024.
The recent rise in semiconductor manufacturing stocks has also boosted the Chinese market, as there is a growing expectation that domestic foundries will benefit from increased domestic demand as the United States tightens export controls in the sector.
Asian markets generally rose on Monday, but gains were largely limited by pre-Trump caution. In addition to the US presidential inauguration, this week also focuses on a series of important economic indicators and the Bank of Japan meeting.
Australia's index rose 0.2%, while India's index turned moderately positive after posting a series of sharp declines last week.
Singapore's index was a laggard, falling 0.3%, while South Korea's index was trading flat. Any disruption to global trade could have a major impact on both countries' economies, which rely on exports.
