Asian Stocks Show Modest Gains Amid Economic Slowdown Concerns

Asian stocks started the week with modest gains despite signs of China's economic slowdown. The Hang Seng closed slightly higher as factory output, retail sales, and investment missed expectations. Investors await interest rate decisions from the US Federal Reserve and the Bank of Japan, with potential impacts on global markets.

Asian stocks opened the week with modest gains, following a strong performance by US stocks which are nearing record highs.

Hong Kong's Hang Seng Index closed just 0.1% higher, reflecting concerns over China's slowing economy as recent data indicates disappointing factory output, retail sales, and investment figures. Additionally, unemployment has surged to a six-month high, posing further challenges.

Stephen Innes of SPI Asset Management commented on the situation, highlighting the urgency for China's leadership to act to prevent further economic stagnation.

Meanwhile, Australia's S&P/ASX 200 edged up by 0.3%, closing at 8,121.60. Markets in Japan, mainland China, and South Korea were closed for holidays.

Investor attention now turns to the Federal Reserve's policy meeting, where an interest rate cut is expected. The Bank of Japan's meeting later this week is projected to maintain the current rate. In currency markets, the Japanese yen strengthened against the dollar, which fell to 139.75 yen. The euro climbed slightly to USD 1.1115 from USD 1.1076.

US futures declined, but oil prices saw an uptick. The S&P 500 rose 0.5% to 5,626.02, nearing its all-time high, thanks to rallies in major tech stocks. The Dow Jones and Nasdaq also posted gains.

Bond markets have provided support, easing Treasury yields ahead of the Fed meeting. Expectations are high for a rate cut, which would be the first in over four years, as the Fed aims to balance economic support with inflation control.

Traders are anticipating the possibility of a significant rate cut, with some seeing a 50-50 chance for a half-percentage point reduction, rather than the customary quarter-point cut.

In energy markets, US crude oil gained 41 cents to USD 68.16 a barrel, while Brent crude rose 29 cents to USD 71.90 a barrel.

(With inputs from agencies.)