Asia-Pacific stocks mixed amid dovish Fed signals, and broadening Middle East conflict

Asia-Pacific stock markets were mixed on Monday, following a rally on Wall Street on Friday after US Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole suggested the Fed could start cutting interest rates in September.

Markets also monitored geopolitical developments in Tensions are rising in the Middle East after Hezbollah launched rocket attacks on Israel over the weekend in retaliation for the assassination of one of its top commanders in Beirut last month.

Japan (NKY:IND) -0.94%Japan’s Nikkei 225 index fell, while the broader Topix index fell on Monday, as investors continued to assess the Bank of Japan’s monetary policy outlook.

The Japanese yen rose above 144 yen to the dollar, hitting a three-week high, as hawkish comments from Bank of Japan Governor Kazuo Ueda contrasted with Federal Reserve Chairman Jerome Powell’s dovish stance.

China (SHCOMP) +0.05% The Shanghai Composite Index struggled to find a clear direction as investors continued to assess the economic outlook in China.

Domestically, the central bank injected 300 billion yuan through a one-year multilateral financing facility, while keeping the policy rate at 2.30% after cutting it by 20 basis points in July.

Meanwhile, traders are now looking ahead to this week’s China PMI data for a clearer view on the health of the country’s economy.

Hong Kong (HSI) +1.16%Hong Kong stocks rose in early trading on Monday after closing slightly lower in the previous session.

India (Sensex Index) +0.76%Indian stocks rose in early trade on Monday, after remaining flat in the previous session.

India’s inflation rate fell to 3.54%, the lowest since August 2019, due to lower food prices.

Australia (AS51) +0.76%The S&P/ASX 200 index rose to a three-week high, with commodity-related and financial stocks leading the rally.

Investors are now looking ahead to Australia’s monthly consumer price index this week to gauge the path of domestic monetary policy.

In the United States, the three major indexes closed higher on Friday, after Federal Reserve Chairman Jerome Powell indicated that an interest rate cut was imminent. Powell expressed confidence that inflation would return to the central bank’s 2% target, while assuring markets that they were balancing risks to the labor market.

U.S. stock futures were little changed on Monday as investors looked for fresh catalysts that could push the indexes to record highs: Dow -0.04%; S&P 500 -0.06%Nasdaq -0.05%.

Currencies: (JPY:USD), (CNY:USD), (AUD:USD), (INR:USD), (HKD:USD), (NZD:USD).

More about Asia: