Asian stock markets rose on Monday, with Chinese stocks nearing a seven-year peak on hopes for more infrastructure spending and policy stimulus, while oil prices suffered further from excess supply.

Activity was guarded most elsewhere in a week book-ended with holidays and a US jobs report that could affect the timing of interest rate hikes there.

Shanghai shares climbed 1.9 per cent to test the highs last seen in May 2008 on hints that Beijing supported the market’s rise. The Hang Seng China Enterprises Index also added 3.5 per cent after China allowed mainland mutual funds to buy Hong Kong stocks.

After some early dithering, Japan’s Nikkei firmed 0.8 per cent, helped by talk of demand for the new quarter and financial year.

MSCI’s broadest index of Asia-Pacific shares outside Japan recouped early losses to gain 0.4 per cent. European bourses were tipped to open firmer, while S&P EMini stock futures were quoted up 0.4 per cent.

Fed rate hike

Federal Reserve Chair Janet Yellen had on Friday reaffirmed that US rates would likely start rising later this year but emphasised the pace of tightening would be gradual and data-dependent.

The conditional outlook helped nudge longer-dated Treasury yields lower and left the dollar listless for the moment. It fetched 119.21 yen on Monday, a whisker higher than at the end of last week and short of the near eight-year peak of 122.04 set early this month.

The euro eased back to $1.0861, having in the last two weeks pulled up from a 12-year trough of $1.0457.

Crude oil

Oil prices fell further as Iran and six world powers tried to reach a nuclear deal that could add more supply to the market if sanctions against Tehran are lifted.

US crude eased 77 cents to $48.10 a barrel and Brent lost 42 cents to $55.99.

Data diary

The data diary in Asia was rather sparse, with Japan reporting a disappointing decline in industrial output for February. Figures on German inflation, European confidence and US personal income and spending are due later in the session.

Flash inflation data for the euro zone are out Tuesday and manufacturing surveys on China the day after. That should be just an appetiser for Friday’s US payrolls report.

US payrolls report

Economists polled by Reuters are forecasting a healthy 244,000 rise in non-farm payrolls in March. If confirmed, it would be the 13th straight month of job gains of over 200,000, a run not seen since 1994-95.

The market reaction will be complicated by holidays across much of the western world on Friday. Only some US markets will be open and then only for shortened hours.

Greece debt talks

Investors will again have to keep a wary eye on Greece and its talks with international creditors where the parties are struggling to come up with a list of acceptable reforms.

Greece will run out of money by April 20 if it does not secure funding from its European partners, a source familiar with the matter told Reuters last week.

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