Global markets gain on hopes of fresh Chinese stimulus

Global markets edged higher on Monday after Chinese shares surged in a volatile market on hopes for new government stimulus measures.

Asian stocks rose in tandem, amid speculation the Chinese government will accelerate mergers among state-owned enterprises.

Japan's Topix index climbed 0.7 per cent to an eight year high - its highest close since July 2007. Over 85 per cent of companies in the index have completed earnings announcements this quarter, as per Bloomberg data.

The Shanghai Composite Index advanced 4.9 per cent, on the back of a 10 per cent surge in the prices of 78 stocks, including China Shipbuilding Industry Co and China United Network Communications Ltd.

The MSCI Asia Pacific Index rose 0.3 per cent to 141.46 as of 4:01 pm in Hong Kong.

The Shanghai index has climbed 7.2 per cent this month as authorities took unprecedented steps to shore up markets, including banning stake disposals by major shareholders, suspending initial public offers and requiring state-run institutions to support the market with equity purchases.

Australia's S&P/ASX 200 Index rose 0.6 per cent as banks rallied.

India's S&P BSE Sensex rose 134.17 points or 0.48 per cent to 28,370.56 and the Nifty advanced 40.45 points or 0.47 per cent to 8,605.05 points.

New Zealand's NZX 50 Index slipped 0.1 per cent and South Korea's Kospi index declined 0.4 per cent. Markets in Singapore are closed for a holiday.

Futures on the Standard & Poor's 500 Index added 0.1 per cent. The underlying measure fell 0.3 per cent on Friday as US jobs data boosted trader expectations for a Federal Reserve interest-rate increase next month.

France's CAC 40 was up 0.3 per cent to 5,171.76 and Germany's DAX rose by the same rate to 11,521.70. Britain's FTSE 100, however, shed 0.8 per cent to 6,668.13 as a drop in commodity prices weighed on its many mining stocks.

US shares were set to recover from recent losses, with both the S&P 500 and Dow futures up 0.2 per cent.

Meanwhile, China's trade figures shrank unexpectedly in July, showing the world's second-largest economy faces weak demand both at home and abroad. Exports contracted by 8.3 per cent over a year earlier and imports were off by 8.1 per cent. For the year to date, exports are off 14.6 per cent and imports down 0.8 per cent.

Market expects this to put further pressure on Beijing to stimulate domestic economy and to avert politically sensitive job losses in export industries.