Asian equities posted broad gains on Monday as investors welcomed renewed diplomatic momentum in the Russia-Ukraine conflict and looked ahead to US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later this week for signals on potential rate cuts.
Talks between US President Donald Trump and Russian President Vladimir Putin in Alaska concluded without concrete agreements but resulted in Russia offering what Trump described as “game-changing” security guarantees for Ukraine.
The move injected fresh momentum into stalled negotiations aimed at ending the three-and-a-half-year-old war.
Further discussions are set to continue at the White House today, with the leaders of the UK, France, and Germany joining Ukraine’s president in meetings with Trump to push for a negotiated settlement.
Chinese equities rally
In China, the Shanghai Composite Index climbed 0.85 percent to 3,728.03, reaching a ten-year high as both institutional and retail investors stepped up buying.
Optimism that progress on the Russia-Ukraine front could ease US scrutiny of China’s purchases of Russian oil added to sentiment.
The CSI 300 Index rose 0.9 percent to its highest in almost a year.
Trading activity surged, with shares worth 2.75 trillion yuan (US$382.9 billion) changing hands across mainland exchanges, the largest turnover since October 9 when a central bank stimulus package sparked a rally in equities and property stocks.
Bond markets also reflected shifting sentiment. The yield on China’s 10-year government bond climbed 2.4 basis points to 1.771 percent, marking a four-month high.
Hong Kong stocks were mixed, with the Hang Seng Index falling 0.4 percent to 25,176.85 while the Hang Seng Tech Index advanced 0.7 percent.
The renewed appetite for Chinese equities comes after years of underperformance.
With fixed-income products offering diminishing returns—10-year bond yields fell to a record low of 1.597 percent in January and one-year deposits yield just 1.5 per cent—investors are increasingly attracted to equities.
Companies on the CSI 300 Index currently provide an average dividend yield of 2.5 per cent on a trailing 12-month basis, according to Bloomberg data.
Japan extends record highs
In Japan, stocks continued their upward trajectory, with the Nikkei rising 0.77 percent to 43,714.31, hitting a record high ahead of domestic inflation data due later this week.
The Topix added 0.43 percent to 3,120.96.
A weaker yen lifted auto stocks, with Honda, Toyota, and Nissan gaining between 2 and 3 percent.
Retail giant Fast Retailing rose 1.3 percent, while chip-testing equipment maker Advantest advanced 1.5 percent.
The rally followed comments from the government that the US is not pressuring the Bank of Japan to pursue further rate hikes, easing concerns of policy friction.
Other regional markets
South Korean equities lagged behind regional peers.
The Kospi fell 1.50 percent to 3,177.28, snapping a two-day winning streak amid investor concerns about potential US tariff measures targeting semiconductors.
Samsung Electronics lost 2.2 percent and SK Hynix dropped 3.3 percent.
In Australia, the S&P/ASX 200 gained 0.23 percent to close at 8,959.30, while the broader All Ordinaries matched the move, ending at 9,233.50.
Gains were capped by declines in mining and energy stocks, though the benchmark remained near record highs after last week’s rally.
US market recap
Wall Street ended Friday mixed after a string of economic reports offered contrasting signals.
The Dow Jones Industrial Average rose 34.86 points, or 0.1 percent, to 44,946.12.
The S&P 500 declined 0.3 percent to 6,449.80, while the Nasdaq Composite fell 0.4 percent to 21,622.98.
Despite the day’s weakness, all three major indices posted weekly gains.
The Dow added 1.7 percent, while the Nasdaq and S&P 500 advanced 0.8 percent and 0.9 percent, respectively.
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