Asia stocks rise: Japan surges on Takaichi bets, China buoyed by positive GDP

Updates with India open, earnings context 

Investing.com-- Most Asian stocks advanced on Monday, with Japanese shares hitting record highs amid renewed bets that fiscal dove Sanae Takaichi will secure the premiership, while Chinese markets took support from mildly positive economic growth data. 

Regional markets took a positive lead-in from Wall Street after U.S. officials struck a conciliatory tone on brewing trade conflict with China. High-level Sino-U.S. trade talks are also set to continue in the coming weeks. 

S&P 500 Futures rose 0.1% in Asian trade, with focus on a slew of major third-quarter earnings in the coming days. Streaming giant Netflix Inc (NASDAQ:NFLX) will report on Tuesday, while electric vehicle maker Tesla Inc (NASDAQ:TSLA) is due on Wednesday. 

Japan’s Nikkei at record highs on Takaichi premiership cheer 

Japan’s Nikkei 225 surged nearly 3% to a record high of over 49,000 points, while the TOPIX jumped over 2% and remained close to record highs. 

A host of local media reports said that Japan’s ruling Liberal Democratic Party had secured enough backing from its allies to form a coalition government with Takaichi as prime minister. 

Takaichi is viewed as a fiscal dove, and is broadly expected to increase government spending and oppose more interest rate hikes by the Bank of Japan. Her election as the leader of the LDP in late-September had sparked a stellar rally in Japanese markets, on bets of more accommodative conditions under her premiership. 

A parliamentary vote on Takaichi’s premiership is expected to take place on Tuesday, with the LDP leader set to become Japan’s first female prime minister. 

China rises on positive GDP, Hong Kong rallies on tech rebound 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.9% and 0.7%, respectively, extending early gains on stronger-than-expected third quarter gross domestic product data. 

GDP grew 4.8% year-on-year in Q3, slightly above forecasts of 4.7%. Quarter-on-quarter GDP growth also beat expectations, while year-to-date GDP growth remained above Beijing’s 5% annual target. 

The print showed sustained strength in China’s key export industries, which so far helped offset sustained weakness in consumer spending and the property market. But GDP also grew at its slowest pace in a year. 

But Chinese exports now face increased U.S. headwinds, amid renewed trade tensions between the world’s largest economies. Persistent deflation and weak private investment also present headwinds for the world’s second-largest economy. 

Still, U.S. President Donald Trump said last week that he viewed a trade war with China as “not sustainable,” and that high-level talks with Beijing were set to take place in the coming weeks. 

Hong Kong’s Hang Seng index was a standout performer, rallying 2.5% from a 1-½ month low hit on Friday. Tech stocks led this rebound, after bearing the brunt of selling last week. 

Broader Asian markets were mostly positive. South Korea’s KOSPI rose 1.2% and came close to a record high, also benefiting from sustained strength in tech shares, especially chipmakers. 

Memory chip giant SK Hynix Inc (KS:000660) jumped over 3% to a record high, extending recent gains following positive earnings from chipmaking bellwether TSMC.

TSMC (TW:2330) rose 2% in Taipei trade and remained close to record highs, after it clocked stellar third-quarter earnings last week. 

India’s Nifty 50 index rose 0.5% in morning trade, with investors mostly looking past comments from Trump that he will maintain high tariffs on Indian goods until the country ceases its purchasing of Russian oil.

Trump had slapped India with 50% tariffs earlier in August, and has so far shown little inclination towards lowering the tariffs.

Singaporean markets were closed for a holiday, while Australia’s ASX 200 added 0.1%. 

Asian Q3 earnings due this week

Asian markets are also gearing up for the third-quarter earnings season, with several regional companies-- chiefly from China and India-- set to report this week.

China Unicom Hong Kong Ltd (HK:0762) is due to report on Wednesday, while BOC Hong Kong Holdings Ltd (HK:2388), WuXi AppTec Co Ltd (SS:603259), and China Overseas (HK:0688) are due on Friday.

India’s Hindustan Unilever Ltd. (NSE:HLL), Dr Reddy’s Laboratories Ltd (NSE:REDY), and NTPC Ltd (NSE:NTPC) are also set to report earnings this week. 

Anglo-Australian miner BHP Group Ltd (ASX:BHP) will also report its quarterly production figures on Tuesday.