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The Hang Seng Index added 1.8 per cent to 27,027.16 at the close, the highest in a week. The Hang Seng Tech Index gained 1.3 per cent. On the mainland, the CSI 300 Index climbed 1.6 per cent and the Shanghai Composite Index rose 1.4 per cent.
Stocks kicked off the week’s trading on a strong note, as investors shifted to the risk-on mode after an easing of the sell-off in risk assets, which was spurred by a meltdown in the commodities market. The Dow Jones Industrial Average rose to a record on Friday, marking a rotation into cyclical stocks with more fundamental support and a diversification away from artificial intelligence-linked companies with massive capital expenditures.
Also adding to the upbeat mood was the sweeping victory by Japan’s ruling Liberal Democratic Party in the early parliamentary election over the weekend. The Nikkei 225 surged almost 4 per cent to a record on Monday after Prime Minister Sanae Takaichi’s party secured a historic election triumph. The result cleared the way for more fiscal stimulus, reinforcing a bullish outlook for stocks.
“From a market perspective, the outcome is strongly supportive for Japanese equities, particularly in the defence and economic security sectors, as Takaichi now has broad flexibility to pursue her pro-growth economic agenda and advance structural reforms,” said David Chao, a strategist at US asset-management firm Invesco.
