China fuels Asian stocks rally, oil climbs on Red Sea worries
By Kevin Buckland
TOKYO (Reuters) — Chinese equities led a rally in Asian stocks to start the week, after regulators took new steps over the weekend to support the market.
Oil climbed after a step-up in Middle East violence, as a missile attack by Yemen's Houthi group caused a fire on a fuel tanker in the Red Sea, while three U.S. troops were killed after a drone attack in Jordan.
The dollar and U.S. Treasury yields hovered in the middle of recent ranges ahead of a highly anticipated Federal Reserve policy meeting later in the week.
Hong Kong's Hang Seng jumped 1.4%, and a sub-index of mainland property shares surged 3.6% after China's securities regulator said on Sunday that it will fully suspend the lending of restricted shares.
Regional stocks had already started the day on a firm footing, but extended gains after the Hong Kong open, with Japan's Nikkei gaining 0.8% and South Korea's Kospi advancing 1.2%, while Australia's stock benchmark added 0.4%.
Mainland China blue chips, however, were little changed after seesawing in early trade.
U.S. stock futures pointed 0.1% lower after the S&P 500 slipped 0.07% on Friday to snap a five-day streak of setting fresh all-time closing highs, although it marked a new intraday record during that session.
The backdrop for that was a continued moderation in consumer inflation in Friday's data, which added to the narrative for Fed rate cuts in coming months, but also suggested policy makers had little pressure to rush.
Markets expect the Fed to keep policy steady on Wednesday, but will be hunting for clues on when a first rate cut might come. Economists mostly predict June, but traders are pricing the risk of a March move at essentially a coin toss, according to CME Group's
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