03:15 GMT Monday. Most Asia-Pacific bourses were sporting modest gains following better-than-expected US jobs data and a fresh Chinese growth target, although a stronger yen weighed on Japanese stocks.
Australia’s S&P/ASX 200 was up 1 per cent while in Hong Kong the Hang Seng added 0.4 per cent. On the mainland China’s Shanghai Composite was up 0.9 per cent while the Shenzhen Composite rallied 2.8 per cent.
The mood in Japan was gloomier in spite of a positive lead from Wall Street. The Nikkei was down 0.4 per cent with the yen, a perceived haven asset, having strengthened as much as 0.6 per cent since Friday to Y113.51 per US dollar.
The divergence between Japan and other markets around the region indicated uncertainty among investors as they await policy announcements from several central banks this week, while digesting a stream of economic news from China’s annual National People’s Congress.
Over the weekend, in a speech that struck an optimistic tone while acknowledging the difficulties facing the economy, Chinese premier Li Keqiang announced a target for economic growth of 6.5-7 per cent this year. That compared with last year’s goal of “around 7 per cent” and actual growth of 6.9 per cent, though was above what many economists believe is realistic. Nevertheless, the reception among investors was generally positive.
“The adjustment of the growth target reflects the authorities’ recognition of strong headwinds to the economy, particularly overcapacity in upstream industries and high housing inventory,” wrote analysts at Nomura. “Achieving even the lower bound of the growth target, however, will still be challenging.”
Mr Li also pledged further reforms, specifically of China’s indebted state-owned enterprises, and increased competition in certain industries.
Optimism also won out among US investors on Friday, with the S&P 500 closing up 0.3 per cent following a better-than-expected jobs report for February showing non-farm payrolls rose by 242,000, while the gains of the previous two months were revised up by 30,000 and the jobless rate held steady at 4.9 per cent. However, gains for job creation were tempered by news that wage growth has stagnated.
Friday’s gain took the S&P 500 up 2.7 per cent for the week, leaving it 10.5 per cent above a two-year intraday low hit three weeks ago. The US equity benchmark above its 100-day moving average — a bullish technical signal — for the first time in 2016, according to Reuters data.
Looking ahead, central banks in New Zealand, Canada and Europe will announce policy decisions this week. Of most interest will be the statement from the European Central Bank, which is widely expected to unveil further monetary easing measures.
In commodities, gold was flat at $ 1258.32 an ounce. Brent crude, the global oil benchmark, was up 1.7 per cent at $ 39.36 a barrel after rising 10.3 per cent last week. West Texas Intermediate, the US marker, rose 1.7 per cent to $ 36.53.
The Chinese central bank allowed the renminbi to strengthen, setting the “fix” for the currency — the daily reference rate around which it is permitted to trade 2 per cent to either side — 0.26 per cent stronger at Rmb6.5113 per dollar.
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