Forexpros – Asian stock markets were broadly higher in holiday-thinned trade on Monday, as Friday’s disappointing data on first-quarter U.S. economic growth fuelled expectations for another round of easing from the Federal Reserve.
During late Asian trade, Hong Kong’s Hang Seng Index surged 1.7%, while Australia’s S&P/ASX200 rose 0.8%.
Trading volumes in the region were subdued as markets in Japan and mainland China remained closed for a public holiday.
The Commerce Department said Friday that gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase and slower than the 3.0% pace in the prior three months.
Despite improving consumer demand, reduced government spending and business investment cut into growth.
The disappointing data fuelled expectations that the Fed will embark on a third round of bond purchases to boost growth in the world’s largest economy.
Bond-buying, or quantitative easing, tend to drive down long-term interest rates. Low bond yields generally encourage investors to shift money to buying stocks.
Shares in Hong Kong posted sharp gains on the back of strong corporate earnings, bringing this month’s gain to 2.5%. Hong Kong’s benchmark index has gained nearly 14.5% since the start of 2012.
Bank of Communications saw shares climb 3.8% after reporting CNY15.9 billion in first quarter net income, above expectations for income of CNY15.5 billion.
Agricultural Bank of China, the world’s sixth largest lender by market value, rose 1.65% after it posted profit of CNY43.5 billion in the first quarter, buoyed by a 22% jump in interest income.
The upbeat earnings results boosted other shares in the sector, with Bank of China shares gaining 2.2%, China Construction Bank up 2% and Industrial and Commercial Bank of China shares rising 1.15%.
Shares in China Coal Energy Company also contributed to gains, jumping 3.85% after posting a 15% increase in first quarter profit.
Elsewhere, in Australia, raw material producers were broadly higher, tracking gains in copper and gold prices, boosting earnings prospects for miners and energy explorers.
Mining giants BHP Billiton and Rio Tinto rose 1.9% and 1.3% respectively, while gold producer Newcrest Mining rallied 2.45%.
Market participants were looking ahead to a policy-setting meeting by the Reserve Bank of Australia on Tuesday, amid growing expectations for a 0.25% rate cut.
Looking ahead, the outlook for European stock markets was mildly upbeat. The EURO STOXX 50 futures pointed to a gain of 0.3%, France’s CAC 40 futures indicated an increase of 0.35%, Germany’s DAX futures rose 0.5%, while London’s FTSE 100 futures added 0.3%.
Later in the day, the euro zone was to release preliminary data on consumer price inflation, while the U.S. was to publish official data on core personal consumption expenditures, price inflation and personal spending, as well as a report on business activity in Chicago.
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