Asian equity markets ended mostly higher on Monday as the Yen weakened after Japanese trade balance figures missed expectations, and oil prices held steady after posting their first weekly decline in five weeks on concerns over rising production and swelling stockpiles in the US.
Reports showed that Japan posted a merchandise trade deficit of 1,086.9 billion yen in January as exports slowed down due to a decline in US exports and the timing of Chinese New Year holidays. That missed forecasts for a shortfall of 625.9 billion yen following the 640.4 billion yen deficit in December.
Chinese shares ended higher after reports that pension funds are entering the stock market. Investor sentiment was also boosted after China’s securities regulator unveiled new rules on Friday restricting excessive and frequent fundraising by some listed companies.
Japanese shares made small gains in a choppy session marked by low volumes as investors stayed on the sidelines with the US markets closed for a holiday. Though, a lack of clarity on the timing and scope of promised pro-growth policies from the Trump administration and the probability of a US rate hike as early as March kept a lid on gains across the region. The Federal Reserve will release the minutes of its last monetary policy meeting on Wednesday, with investors looking for further clues on Fed’s assessment of the economic conditions and the timing of the next rate hike.
Indian stock markets closed the first day of F&O expiry week on an optimistic note, with Sensex gaining half a percent, and Nifty closed above 8850. Investors continued to build large positions across the board as sentiments got a boost after the report that GST Council on Saturday approved a law to compensate states for any loss of revenue from the implementation of the new national sales tax but deferred approval for enabling laws to the next meeting. The council will meet again on March 4-5 to approve the legally vetted draft of the supporting legislation for Central GST (C-GST) and Integrated GST (I-GST), before the start of the second leg of the Budget Session.