Japan, China stocks spike; Australia dips as commodity prices weigh

Shares in Japan and Shanghai jumped to fresh 2 1/2 -month peak, supported by a weaker yen and stimulus hopes, respectively, while concerns over China’s slowdown drove most other Asian markets lower.

Japan’s Nikkei Stock Average finished up 1.96% at 19,642.74, its highest close since late August, as the yen reached a fresh low since late August, with the dollar last trading at ¥123.58, up 0.34%.

The Shanghai Composite Index was up 1.58% to 3,648.42. That adds to a 6% jump the previous week.

Hong Kong’s Hang Seng Index was down 0.61%.

Australia’s S&P/ASX 200 was down 1.70%, while South Korea’s Kospi lost 0.75%. Australia was especially hit by declining commodity prices.

Over the weekend, fresh economic reports showed that Chinese exports in October dipped for the fourth month in a row - by 6.9% year-over-year in dollar terms, after a drop of 3.7% in September. The October numbers were below the median 4.1% decline forecast in a Wall Street Journal poll.

Investors are now digesting the regulators’ announcement late Friday that they plan to remove a ban on initial public offerings, after suspending them in July in the peak of a share selloff.

In the past, China’s stock regulator has adjusted the timing of public offerings — depending on how the market is trading — introducing new listings when it believes investor appetite is sufficiently healthy.

Since 1990, the market has declined five times and risen four during periods when regulators allowed firms to list, according to a morning note by Bank of Communications Ltd. Analysts suggest that regulators think the rally will continue that is why they resume IPOs.

The Shanghai Composite Index entered bull market territory last week. It is defined as a rise of 20% from a recent low. Economists consider its cross above 3500 could inspire more local investors to purchase shares again.

The Chinese exports data, analysts say, could pressure authorities to fire up stimulus measures, which would boost markets later Monday. Many think the Chinese market will rise until the Fed hikes.

A strong October jobs report in the U.S. on Friday strengthened hopes that the Federal Reserve could raise interest rates as soon as next month. Patchy data from previous weeks had led some to believe that time frame could be pushed to next year.

On Saturday, the People's Bank of China reported that foreign-exchange reserves in October added $11.39 billion to $3.526 trillion, ending a five-month streak of monthly declines. Economists said it signaled lower forecasts among market watchers that the yuan would depreciate further and signal that policy-makers’ efforts to stem illegal outflows have been quite successful.

In the U.S., shares were little changed Friday, but underlying sectors fluctuated as investors withdrew money from income-yielding businesses, which do well during periods of low interest rates, and rushed into lenders, whose profits are expected to increase as rates rise.