Investing.com– Most Asian stocks rose on Monday, tracking gains in Wall Street after softer U.S. inflation data spurred bets that interest rates will still fall in the coming year.
Japanese stocks were among the better performers for the day, buoyed by speculation over a potential merger between Honda (NYSE:HMC) and Nissan (OTC:NSANY), as reports said a deal was close.
Regional markets took positive cues from Wall Street, which surged on Friday after PCE price index data- the Federal Reserve’s preferred inflation gauge- read softer than expected for November. The reading helped ease some concerns that U.S. rates will fall at a slower pace in 2025, especially after the Fed struck a hawkish tone during a meeting last week.
U.S. stock futures rose in Asian trade, also supported by optimism over the U.S. government avoiding a shutdown.
Japanese shares rise amid Honda-Nissan merger reports
Japan’s Nikkei 225 and TOPIX indexes rose 0.9% and 0.5%, respectively.
Gains in Japanese markets came amid increased focus on Honda Motor Co Ltd (TYO:7267) and Nissan Motor Co., Ltd. (TYO:7201), after a report from public broadcaster NHK said a preliminary agreement will be signed later on Monday, with the goal of finalizing merger terms by June 2025.
Honda rose nearly 2%, while Nissan fell slightly after rallying about 20% last week. Mitsubishi Motors Corp. (TYO:7211), which could also be pulled into the merger, rose 2.8%.
The merger has the potential to create the third-largest global automaker by sales, and is being considered as Honda and Nissan grapple with increased competition and softening sales, especially in top auto market China.
Beyond speculation over the merger, focus in Japanese markets was also on key inflation data for November released on Friday. The reading showed inflation picked up more than expected in November, keeping expectations of interest rate hikes by the Bank of Japan squarely in play.
Asia stocks rise with focus on US rates, China stimulus
Broader Asian markets advanced on Monday amid optimism over softer U.S. inflation, although most regional markets were still nursing losses from the prior week.
Australia’s ASX 200 rose 1.2%, with local shares of News Corp (ASX:NWS) (NASDAQ:NWSA) rising 2.2% after after the firm said it will sell television broadcaster Foxtel to British sports streamer DAZN Group in a A$3.4 billion ($2.1 billion) deal.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.6% and 0.2%, respectively, while Hong Kong’s Hang Seng index added 0.5%.
Chinese markets were sitting on some gains in recent sessions after Beijing offered up more assurances that it will ramp up fiscal spending in 2025 to support economic growth.
South Korea’s KOSPI added 1.5% and was the best performer in the region, as investors bought into heavily discounted stocks after local markets were walloped by heightened political uncertainty earlier this month.
Singapore’s Straits Times Index rose 1.1%, with Talkmed Group Ltd (SGX:TALK) rallying nearly 6% after receiving an offer to be taken private.
Singapore Post Ltd (SGX:SPOS) slid 8% after it fired its CEO Phang Heng Wee over alleged misconduct.
Futures for India’s Nifty 50 index pointed to a slightly positive open, after the index fell sharply through the prior week.