Asia-Pacific Stocks Finish Strong as China Shares Surge 2%; Aussie Index Sets Record Close on Afterpay Buyout

The major Asia-Pacific stock indexes finished higher on Monday, as factory data out of China came in well below expectations. Meanwhile, overall sentiment in the region was positive after last month’s weak performance, helped by a sharp rise in shares of Australia’s “buy now, pay later” giant, Afterpay.

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 27781.02, up 497.43 or +1.82%. Hong Kong’s Hang Seng Index finished at 26235.80, up 274.77 or +1.06 and South Korea’s KOSPI Index closed at 3223.04, up 20.72 or +0.65%.

In China, the Shanghai Index settled at 3464.29, up 66.93 or +1.97% and in Australia, the S&P/ASX 200 Index finished at 7491.40, up 98.80 or +1.34%.

China Shares Up after Worst Month in Nearly 3 Years; Hong Kong Ends Higher

Chinese A-share posted their biggest percentage gain since late May on Monday, as investors snapped up stocks battered by a sell-off last month despite rising worries around a surge in new coronavirus cases.

Hong-Kong shares also rose, with the Hang Seng Index ending 1.06% higher after touching its lowest point since early November last month. Chinese H-shares listed in Hong Kong finished up 1.12%.

“Investors across the region are likely following participants buying the dip in Chinese stocks… plus the rise in domestic virus cases may leave further room for the PBOC to ease policy going ahead,” Margaret Yang, a Singapore-based strategist at IG said. “

In economic news, the Caixin/Markit Manufacturing PMI for July released Monday came in at 50.3, much lower than expectations by analysts in a Reuters poll for a reading of 51.1. The Caixin Manufacturing PMI figure had come in at 51.3 in June.

China’s official manufacturing PMI released over the weekend also showed factory activity growth slowing in July, with the figure for the month coming in at 50.4 versus June’s reading of 50.9.

Afterpay Lifts Australian Shares to Record Close

Australian stocks jumped to a record close on Monday, with buy-now, pay-later giant Afterpay leading the charge after it agreed to a $29 billion buyout by Jack Dorsey’s Square Inc in the country’s largest ever deal that also sent its peers higher.

Afterpay settled 19.5% higher after payments firm Square agreed to buy it, creating a global transactions giant and tapping an industry that has boomed over the past year.

Tech stocks jumped 6.5% in their best session since late March 2020, while financials rose 1.9% to their highest close since June 22, with all the “Big Four” banks in positive territory.