Sydney: Asian stock markets experienced a notable uptick on Monday, propelled by a 2.8% surge in Japan's Nikkei 225 index. This rally was fueled by the announcement of a coalition agreement that could pave the way for Sanae Takaichi to become Japan's first female prime minister. Investors interpreted this potential leadership change as a signal for pro-stimulus policies, boosting market sentiment. Concurrently, China's third-quarter GDP growth of 1.1% quarter-on-quarter exceeded expectations, though the year-on-year growth slowed to 4.8%, indicating ongoing challenges in the property sector. Industrial output rose by 6.5%, while retail sales saw a modest increase of 3.0% year-on-year.
U.S. stock futures pointed to a positive open, supported by optimism surrounding corporate earnings. The S&P 500 is projected to report an 8.8% growth, driven primarily by the technology sector. Key companies such as Tesla, Netflix, and Procter & Gamble are set to release their earnings this week, with investors keenly awaiting their performance. Additionally, the Federal Reserve's stance on interest rates remains a focal point. Expectations are high for further rate cuts, including one at the upcoming meeting, as core inflation is anticipated to hold steady at 3.1%, aligning with market forecasts.
In the commodities sector, oil prices experienced a slight decline due to escalating trade tensions between the U.S. and China. Brent crude futures fell by 0.4% to $61.05 per barrel, while U.S. West Texas Intermediate futures also decreased by 0.4% to $57.33. This downturn is attributed to concerns over an economic slowdown and a potential supply glut in 2026, as warned by the International Energy Agency. The geopolitical landscape, including upcoming talks between Presidents Trump and Putin, adds to the uncertainty, potentially impacting oil trade dynamics in Asia.
Overall, global markets are exhibiting cautious optimism. Investors are balancing positive economic indicators and corporate earnings prospects against geopolitical uncertainties and inflationary pressures. The Federal Reserve's forthcoming decisions on interest rates will be pivotal in shaping market trajectories in the near term.