(Bloomberg) — Asian stocks gained the most in more than two months, with India surging to a record as exit polls indicated a resounding victory for Prime Minister Narendra Modi’s party.

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Equities in Australia, Japan and Hong Kong advanced on Monday, pushing the MSCI Asia Pacific Index to its biggest increase since March 21. India’s Sensex outperformed.

The rupee and sovereign bonds also rose, as the election outcome puts Modi’s party in position to push through policy measures that are considered key for economic growth. The rupee was among Asia’s top performers, climbing 0.5%.

“India is well positioned to scale manufacturing in select sectors like electronics, auto, pharma and textiles in the next decade,” Bank of America Corp. analysts including Amish Shah wrote. The government support “would make India an ideal and reliable partner for companies who are looking to shift manufacturing away from China.”

Adding to the impetus was data showing the outlook for Asia’s manufacturing sector is improving, with Japan’s factory reading rising above 50.0 for the first time in a year in May, and data from China, Korea and Taiwan showing gains also. But politics may inject volatility, with tensions surrounding the Middle East and the US election simmering.

More broadly, sentiment has gotten a boost from a weaker dollar in recent weeks, as investors hope the Federal Reserve will finally begin to ease policy. Friday’s reading of core personal consumption expenditures — the Fed’s preferred measure for inflation — showed the smallest increase this year.

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The Bloomberg dollar index was little changed. Yields on Australian bonds and those on 10-year Treasuries edged lower.

Oil fluctuated after OPEC+ set out a plan to restore some production as early as October, despite concerns over the demand outlook and robust supply from outside of the group.

In Mexico, Claudia Sheinbaum is set to become the country’s first female leader in a landslide victory, capitalizing on outgoing President Andres Manuel Lopez Obrador’s popularity while also inheriting rampant criminal violence and a large fiscal deficit left by his government.

This week, traders will be closely watching inflation prints across emerging markets including Indonesia, South Korea and Chile, as well as growth data in Australia and Europe. The European Central Bank may open the door to a weaker euro on Thursday as its first interest-rate cut of the cycle. A US jobs report is released on Friday.

Some key events this week:

  • Indonesia CPI, Monday

  • India S&P Global Manufacturing PMI, Monday

  • Eurozone S&P Global Manufacturing PMI, Monday

  • UK S&P Global / CIPS Manufacturing PMI, Monday

  • US construction spending, ISM Manufacturing, Monday

  • International Atomic Energy Agency board meets in Vienna, Monday

  • South Korea CPI, Tuesday

  • Germany unemployment, Tuesday

  • South Africa GDP, Tuesday

  • Brazil GDP, Tuesday

  • US factory orders, JOLTS, Tuesday

  • Australia GDP, Wednesday

  • South Korea GDP, Wednesday

  • China Caixin services PMI, Wednesday

  • Eurozone S&P Global Services PMI, PPI, Wednesday

  • Canada rate decision, Wednesday

  • Eurozone retail sales, ECB rate decision, Thursday

  • China trade, forex reserves, Friday

  • Eurozone GDP, Friday

  • Mexico CPI, Friday

  • Chile copper exports, trade, CPI, Friday

  • US unemployment rate, nonfarm payrolls, wholesale inventories, Friday

Some of the main moves in markets:


  • S&P 500 futures rose 0.2% as of 1:05 p.m. Tokyo time

  • Nikkei 225 futures (OSE) rose 1.1%

  • Japan’s Topix rose 1%

  • Australia’s S&P/ASX 200 rose 0.7%

  • Hong Kong’s Hang Seng rose 2.3%

  • The Shanghai Composite fell 0.5%

  • Euro Stoxx 50 futures rose 0.9%


  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0852

  • The Japanese yen was little changed at 157.38 per dollar

  • The offshore yuan was little changed at 7.2617 per dollar


  • Bitcoin rose 0.8% to $68,316.77

  • Ether rose 0.3% to $3,797.65


  • The yield on 10-year Treasuries declined two basis points to 4.48%

  • Australia’s 10-year yield declined five basis points to 4.36%


  • West Texas Intermediate crude was little changed

  • Spot gold fell 0.3% to $2,320.97 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess.

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