Asian Stock Market Revival: Post-Correction Optimism

On Monday, China and Hong Kong stock markets experienced a significant rebound. This resurgence was largely inspired by Wall Street's record-breaking performance and bullish trends across Asian markets, led by Japan. Brokerages are advising investors to maintain their stock positions amidst market recovery signs ahead of the upcoming Lunar New Year festival. The previous correction brought the markets down by over 4% since January 29, but it seems to have concluded.

By the lunchtime break, China's blue-chip CSI300 Index had climbed 1.4%, marking its best performance in a month, while the Shanghai Composite Index increased by 1.2%. In Hong Kong, the Hang Seng Index rose by 1.5%, buoyed by growing risk appetite following the Dow Jones Industrial Average surpassing the 50,000 mark for the first time on Friday. Japanese stocks also hit record highs after Sanae Takaichi's successful win in Sunday's election.

Brokerages such as Caitong Securities noted the shrinking turnover in Chinese stocks as the week-long holiday approaches, yet the indices are trending upwards. Investors remaining in the market throughout the festival are expected to reap rewards. Additionally, Chinese entertainment and media stocks benefited from anticipated holiday spending, while stocks linked to real-world assets gained due to Beijing's move to establish a legal framework for RWA tokenisation business. Gold-linked stocks also saw a rise, propelled by continued central bank gold purchases.