Asia report: Shares rally on rate cut hopes, China Caixin PMI

3rd Jun 2024 07:34

(Sharecast News) - Asian share markets rallied on Monday, as investors awaited an expected rate cut from the European Central Bank, while a positive factory activity survey in China also boosted sentiment.

The private Caixin survey showed a rise in its main factory index to a two-year high of 51.7 in May, from 51.4 in April.

A similar survey in Japan showed factory activity expanded for the first time in a year in May, while another in South Korea grew at the fastest pace in two years.

Japan's Nikkei rose 1.16% to 38,940.5, while South Korea's Kospi was up 2.1% to 2,519.24 driven by energy stocks rose after the government gave the go-ahead to start exploratory drilling for vast oil and gas resources off the country's east coast.

Shares of Korea Gas Corporation surged 29.87%. Daesung Energy rose 28.25%, while SK Innovation climbed 7.9% and SK Gas advanced 15.97%.

In China the Shanghai Composite was down 0.36% to 3,075 and Hong Kong's Hang Seng rose 2.5% to 18,467. Australia's ASX 200 gained 0.77% to 7,761.

The ECB looks set to cut rates by a quarter point to 3.75% on Thursday, placing it ahead of the US Federal Reserve, although expectations of a series of rate cuts have been dampened as higher-than-expected inflation readings have shown higher prices have not shifted downwards as fast as policymakers would like.

Reporting by Frank Prenesti for Sharecast.com