Asian Markets Stabilize After Losses, Oil Prices Decline

Asian stock markets stabilized at the beginning of the week after recent losses. In Tokyo, the Nikkei 225, which includes 225 companies, rose by 0.4% on Monday to 63,559 points, while the broader Topix fell by 0.4% to 3,948. In China, the Shanghai Composite gained 1.2% to 3,640, and the CSI 300 of the 300 largest mainland market companies increased by 1.3% to 4,035.

In Japan, the market was supported by strong corporate reports. Tokyo Electron rose by 5.1% following an optimistic profit forecast, and Panasonic by 5.2% after raising its forecast. Among the losers was memory chip manufacturer Kioxia: its shares fell by 13.3% after a disappointing forecast. Separately, investors' attention was drawn to political plans: the government in Tokyo, according to insiders, is considering nearly doubling defense spending over five years to 80 trillion yen (about $508 billion).

In China, quotes were pushed by expectations of state support measures. According to media reports, regulators consulted with financial institutions about new tools for the capital market after a sharp drop in the leading index in October. Additionally, the Central Bank effectively reduced the cost of financing by moving to a one-day loan rate of 1.25%.

“This is effectively a red envelope for financial institutions, which increases their net interest margin by about five basis points,” explained Zhaopeng Xing, a China strategist at ANZ.