Asian Shares Advance On US Inflation, China Manufacturing Data

(RTTNews) - Asian stocks rallied on Monday as soft U.S. inflation data revived rate cut hopes and a private survey showed China's factory activity grew the fastest in about two years in May due to production gains and new orders.

Indian markets led regional gains as exit polls indicated Prime Minister Narendra Modi is likely to win a third consecutive term in office. If Modi wins, he will become the second Indian leader to retain power for a third term after Jawaharlal Nehru.

The dollar began the week on a sluggish note while oil and gold prices were little changed in Asian trading as mediators urged Israel and Hamas to agree to a truce and hostage release deal outlined by the U.S.

Chinese shares ended a choppy session slightly lower despite upbeat manufacturing data. The benchmark Shanghai Composite index dropped 0.27 percent to 3,078.49.

Hong Kong's Hang Seng index jumped 1.79 percent to 18,403.04, led by technology stocks after NVIDIA Corporation unveiled a new line of artificial intelligence chips.

Japanese markets rose sharply after a survey revealed the health of Japan's manufacturing economy improved for the first time in a year during May.

The Nikkei average climbed 1.13 percent to 38,923.03 while the broader Topix index settled 0.92 percent higher at 2,798.07.

Financials topped the gainers list on expectations that they would benefit from a higher interest rate environment. Daiwa Securities Group surged 5.6 percent and Nomura Holdings jumped 4 percent.

Automakers ended lower after the transport ministry said it found irregularities in model applications from five major auto companies.

Toyota Motors dipped 1.8 percent and Mazda Motor gave up 3.3 percent.

Seoul stocks advanced as a survey showed South Korea's factory activity expanded in May at the fastest pace in two years.

The Kospi average rallied 1.74 percent to 2,682.52, with tech heavyweights Samsung Electronics and SK Hynix surging around 3 percent each.

Australian stocks rose notably as the latest manufacturing data pointed to economic recovery.

The benchmark S&P/ASX 200 rose 0.77 percent to 7,761, led by gains in the mining and financial sectors. The broader All Ordinaries index closed 0.67 percent higher at 8,024.10. New Zealand markets were closed for a public holiday. Indian shares outperformed regional peers after exit polls showed the Bharatiya Janata Party (BJP)-led NDA may win over 350 of the 543 seats in the Lok Sabha. The benchmark S&P BSE Sensex was up more than 3 percent.

U.S. stocks ended mostly higher on Friday and Treasury yields eased after the Fed's preferred measure of inflation met estimates and posted the smallest increase this year at 2.7 percent in April, raising hopes for an interest rate cut by the end of the year.

Wage growth moderated, growth in spending by consumers weakened by more than economists expected and growth in incomes for Americans also slowed last month, easing investor woes surrounding inflation and interest rates.

The Dow surged 1.5 percent and the S&P 500 added 0.8 percent while the tech-heavy Nasdaq Composite finished marginally lower.