Asian share markets started the week on a cautious note on Monday as investors assessed the potential fallout from a looming US government shutdown that could delay key economic data releases.
The September payrolls report and other vital indicators may be postponed, leaving the Federal Reserve without official readings ahead of its October 29 policy meeting.
Analysts at Bank of America said that if the shutdown extends beyond the Fed’s meeting, policymakers would be forced to rely on private data, potentially lowering the likelihood of an October rate cut, though only marginally.
Current market pricing implies a 90 percent chance of a cut next month and about a 65 percent probability of another in December.
Japan stocks weaken as automakers and financials decline
Japanese equities fell sharply, extending last week’s declines despite positive cues from Wall Street.
The Nikkei 225 dropped 436.39 points, or 0.96 percent, to 44,918.60, after touching an intraday low of 44,901.68.
Losses were broad-based, with market heavyweight SoftBank Group sliding more than 1 percent and Uniqlo operator Fast Retailing also down over 1 percent.
Automakers underperformed, with Honda declining nearly 2 percent and Toyota falling more than 1 percent. Financial stocks also retreated.
Technology shares provided a partial offset, with Advantest gaining more than 3 percent, Tokyo Electron edging up 0.5 percent, and Screen Holdings adding over 1 percent.
Hong Kong and China lifted by profit data
Hong Kong stocks advanced after Chinese industrial profit figures showed a rebound, easing concerns over corporate earnings in the world’s second-largest economy.
The Hang Seng Index gained 1.4 percent to 26,503.55 by late morning, recovering from last week’s 1.6 percent drop.
The Hang Seng Tech Index rose 1.9 percent.
Technology firms led the rally. Alibaba rose 3.3 percent, JD.com added 2.5 percent, Tencent gained 2 percent, and Meituan advanced 1.6 percent.
On the mainland, the CSI 300 Index climbed 0.6 percent and the Shanghai Composite gained 0.2 percent.
Other regional markets
South Korea’s benchmark Kospi added 1.07 percent to 3,422.40 as of 11:04 a.m. local time, marking a strong rebound from last week’s weakness. The index opened higher and extended gains through the morning session.
In Australia, stocks gained for a third straight session ahead of the Reserve Bank of Australia’s policy meeting on Tuesday.
The S&P/ASX 200 index advanced 0.46 percent to 8,828.20, while the broader All Ordinaries rose 0.44 percent to 9,119.20.
Investors broadly expect the central bank to hold rates steady following a hotter-than-expected inflation report last week.
Indian equities opened higher on September 29, with the Nifty reclaiming the 24,700 level despite mixed global cues.
At the open, the Sensex rose 119.35 points, or 0.15%, to 80,545.81, while the Nifty gained 47.45 points, or 0.19%, to 24,702.15.
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