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Asian Shares Rally On Stimulus Optimism


Asian stocks rallied on Monday as investors cheered new fiscal measures being taken by major economies such as China and Germany to counter a possible recession.

A rebound in U.S. Treasury yields and media reports suggesting Washington and Beijing are actively working to revive negotiations aimed at ending the trade war also buoyed sentiment ahead of a major speech by the U.S. Federal Reserve chief later this week.

China's Shanghai Composite Index soared 59.27 points, or 2.1 percent, to 2,883.10 after the People's Bank of China said it would use market-based reform methods to help lower real lending rates and prop up a slowing economy.

Investors also welcomed U.S. President Donald Trump's comments that he had discussed the impact of Washington's tariffs on Chinese goods with Apple chief Tim Cook. Hong Kong's Hang Seng Index gained 557.62 points, or 2.2 percent, to finish at 26,291.84.

Japanese shares followed Wall Street higher, with the Nikkei 225 Index ending up 144.35 points, or 0.7 percent, at 20,563.16. The broader Topix closed 0.6 percent higher at 1,494.33.

A weaker yen buoyed exporters, with Toyota Motor and Sony climbing more than 1 percent each. Market heavyweight SoftBank advanced 1.7 percent, Fast Retailing added 0.8 percent and Fanuc rose half a percent.

In economic news, Japan posted a merchandise trade deficit of 249.6 billion yen in July, the Ministry of Finance said. That missed expectations for a shortfall of 194.5 billion yen following the 589.5 billion yen deficit in June. Exports were down 1.6 percent year-on-year, topping forecasts for a decline of 2.3 percent.

Australian markets rose sharply, with financials and energy companies leading the surge. The benchmark S&P/ASX 200 Index jumped 61.90 points, or 1 percent, to 6,467.40, while the broader All Ordinaries Index ended up 64.60 points, or 1 percent, at 6,550.50.

Westpac Banking Corp. gained 0.8 percent despite the bank saying it is seeing more missed mortgage payments amid a sluggish economy and a soft housing market. The other three big banks rose between 0.7 percent and 1.6 percent.

Beach Energy spiked 10.8 percent as it upgraded its five-year production outlook and its guidance on cash flow. Woodside Petroleum, Santos, Origin Energy and Oil Search rallied 2-3 percent on higher oil prices.

Business administration provider Smartgroup Corp. jumped 21.7 percent on solid half-year results and a brokerage upgrade.

Miners BHP, Fortescue Metals Group and Rio Tinto ended flat to slightly higher as iron ore and steel futures rebounded on news of stimulus in China and Europe.

Lendlease Group gained nearly 11 percent after the construction firm said it would sell its engineering and services unit.

Meanwhile, gold miners Evolution and Newcrest fell around 3 percent as the precious metal dipped on a firmer dollar.

Steel producer BlueScope Steel also slumped 8.4 percent after reporting a 35 percent decrease in its full-year profit.

Seoul stocks closed higher on hopes of more stimulus from central banks and amid news the U.S. and China are seeking to revive trade talks. The benchmark Kospi climbed by 12.73 points, or 0.7 percent, to 1,939.90.

Trump's chief economic advisor Larry Kudlow said on Fox News Sunday that if teleconferences between both sides' deputies pan out in the next 10 days, the U.S. and China can have a substantive renewal of negotiations.

Earlier, Trump said on Saturday that China wants to settle trade issues with America as it is experiencing the "worst year" in decades, but he reiterated that he was not ready for a deal.

New Zealand shares advanced, with the benchmark S&P/NZX 50 Index finishing up 47.12 points, or 0.4 percent, at 10,702.48. Heavyweight a2 Milk Co. jumped 3.4 percent.

The services sector in New Zealand continued to expand in July, and at a faster rate, the latest survey from Business NZ revealed today with a Performance of Services Index score of 54.7. That's up from 53.0 in June.

U.S. stocks rose sharply on Friday as expectations for more stimulus contributed to a pullback by U.S. treasuries and a subsequent increase in bond yields.

A measure of consumer sentiment for August came in well below estimates, while data on housing starts and building permits proved to be a mixed bag.

The Dow Jones Industrial Average rallied 1.2 percent, the tech-heavy Nasdaq soared 1.7 percent and the S&P 500 added 1.4 percent.

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