Asian stocks mostly up as China enjoys Lunar New Year bump

Mainland Chinese stocks were buoyant after Lunar New Year, leading gains in most other Asian markets on Monday, as figures showed holiday spending surged past pre-pandemic levels.

But Tokyo's key Nikkei index ended flat after a larger-than-expected rise in US wholesale prices on Friday dealt a blow to hopes of an early interest-rate cut by the Federal Reserve.

Shanghai jumped 1.6 per cent at the close after traders returned from a week-long break.

Domestic spending on tourism during the Lunar New Year holiday came in at 632.7 billion yuan ($87.9 billion) -- up 7.7 per cent from 2019 -- Chinese government figures showed.

Analysts also pointed to data showing a 61 per cent year-on-year rise in rail trips as hundreds of millions of people moved across the vast country to visit family.

The figures were a source of relief for Chinese policymakers "grappling with challenges such as slowing economic growth, deflation risks, subdued consumer demand, and a collapse in the property sector", said Stephen Innes, managing partner at SPI Asset Management.

"However, while the surge in tourism provides a glimmer of hope, its long-term sustainability remains uncertain," he said.

China's upbeat moment led gains in other markets, with Seoul up 1.2 per cent and Singapore gaining 0.3 per cent. Sydney, Bangkok and Taipei were also slightly higher, but Jakarta lost 0.5 per cent and Wellington fell 0.6 per cent.

London edged down 0.1 per cent in early trade and Paris shed 0.4 per cent.

Hong Kong closed down 1.1 per cent, breaking a three-day rally, with analysts saying investors felt uneasy after a decision by China's central bank to leave a key policy rate unchanged, seen as an attempt to bolster the yuan.

Yet overall, market players in China were optimistic about sustaining recent positive momentum in Asian shares despite last week's US inflation shock, Innes said.

Taylor Nugent from National Australia Bank also noted that speakers at the US Fed have "continued to preach patience", adding that "the data flow isn't giving them the green light to accelerate their cutting plans".

Despite ending flat on Monday, Tokyo's Nikkei index has been booming, with a positive trend in recent months now taking the index close to an all-time record set in 1989.

Optimism around strong Japanese earnings reports and the weak yen is bolstering that performance, analysts said.

"Some investors may consider profit-taking opportunities as the Nikkei approaches new all-time highs, as many wonder how long the weaker currency, which has supported exporter profits hugely... will last," Innes warned.

Shares in Japanese gaming giant Nintendo tumbled on Monday, closing down 5.8 per cent after reports said its next console would be delayed.