TOKYO- Asian stocks started the week on the front foot, as new steps by Beijing to stabilize the local market outweighed the drag on sentiment from the liquidation of property giant China Evergrande.
However, investors were also sensitive to geopolitical risks with oil rising after a Houthi missile attack caused a fire on a fuel tanker in the Red Sea and a drone attack killed three US troops in Jordan.
The dollar and US Treasury yields hovered in the middle of recent ranges ahead of a highly anticipated Federal Reserve policy meeting later in the week.
In general, the mood in Asia was upbeat with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.7 percent.
The main drag to stocks came from a Hong Kong court order to liquidate Evergrande, the poster child of China’s property meltdown.
Hong Kong’s Hang Seng trimmed gains on the news to be up 0.74 percent , off the 1.9 percent gain made after China’s securities regulator said on Sunday it would fully suspend the lending of restricted shares.
Mainland China blue chips had struggled to make headway early in the session, and eventually slumped 0.64 percent .
Elsewhere, though, Chinese stimulus optimism provided additional momentum to markets that had already started the day on a firm footing. Japan’s Nikkei closed up 0.77 percent , while South Korea’s Kospi advanced 1.47 percent .
“People want to believe in what (Beijing is) doing, it’s just that they had a little bit of a hiccup in terms of communicating their policy intent at the beginning of the year,” said Damien Boey, chief macro strategist at Barrenjoey in Sydney.
“Now, authorities seem to be trying to rectify that (and) unsurprisingly, you are now starting to see stabilization in Chinese equities,” he said. “It may not exactly be the bottom right now, but I think things will eventually get better with a few bumps along the way.”
US stock futures pointed slightly lower after the S&P 500 slipped 0.07 percent on Friday to snap five straight days of fresh all-time closing highs.
