Asian stocks are on the rise on Monday as investors kept a cautious eye on Chinese trade data on rising signs that a slowdown in the world's second-biggest economy is dragging global growth.
FILE PHOTO – Investors are looking at an electronic sign that shows stock information at a brokerage in Shanghai, China on June 20, 2018. REUTERS / Aly Song
The MSCI broader index for Asia Pacific stocks outside Japan. The MIAPJ0000PUS index was barely changed to 490.97 points after rising to the highest level since early December on Friday.
Liquidity was expected to be light during Asian hours, as Japan was on holiday.
Australian stocks rose 0.3 percent, while New Zealand's benchmark index, the nZ50, was 0.2 percent.
Investors expect volatility to increase this week, "as some key issues that have been affecting the decision points of the approach to market sentiment," said Nick Twidale, an analyst at Rakuten Securities.
In front of profits, US banks are in focus with Citigroup's quarterly results (C.N) Monday, followed by JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N) later in the week.
Expectations are bleak, with US corporate profits forecasting a 6.4 percent increase, compared to an estimate of 10.2 percent on Oct. 1 and a large decline from a gain of more than 20 percent in 2018.
The focus of the investor was also on the stoppage of the US government, now on its 24th day, and with no resolution in sight.
Pursuing even more prospects for the markets, Britain is facing an extremely uncertain path, with the vote of an agreement for its exit from the European Union, which is expected to take place in the UK Parliament on Tuesday.
All of these factors were at stake last week when major US indexes ended Friday little changed as investors redefined positions ahead of key risk events. [.N]
Of more immediate concern were China's trade data at the end of the day, with recent signs that Asia's biggest economy was losing steam and that the government planned to reduce its economic growth target to 2019.
The Sino-US tariff war has already halted the trade flows of hundreds of billions of dollars worth of goods and has shaken global markets. Although the two countries have talked for months, few details have been provided about any progress made.
"It's a relatively quiet day in terms of economic data, probably with the Chinese trade balance, the only level 1 data set to bother the gunners," added Twidale.
"Hopefully sentiment will continue to dominate the direction of the market, with business focusing closely on the news channels for the next turnaround on the various issues that are influencing the market."
The Australian dollar AUD = D3, a key indicator of global risk sentiment, fell 0.2 percent from a month high of $ 0.7235 set on Friday.
Elsewhere, the euro has retreated from technical levels again after data from Italy on Friday showed that the euro zone's third-largest economy was at risk of a recession.
The single currency was the last at $ 1.1458.
The dollar index, the DXY, which measures the US dollar against the basket of major currencies, was virtually stable at 95,645 after two consecutive days of gains.
In commodities, oil prices fell on Friday as investors worried about the global slowdown.
Editing by Shri Navaratnam