Asian stocks start week positively

Asian stocks started on a positive note Monday, buoyed by gains on Wall Street last week although spiralling Covid-19 cases in China weighed on sentiment in thin holiday trade.

Several markets were closed, including Hong Kong, Sydney and Singapore, but Shanghai, Tokyo, and Seoul saw cautious gains.

A set of fresh data last week indicated a slowing of US inflation, although many investors kept their guard high, predicting sluggish overall growth next year.

However, the personal consumption expenditures price index, eyed closely by the Federal Reserve as a gauge of inflation, increased 0.1 percent from October to November and 5.5 percent from November last year.

But analysts expected caution to rule the day until more concrete signs emerge that inflation in under control.

"While inflation may be receding... investors will likely remain sufficiently sceptical until we see a more sustained and pronounced deceleration," Stephen Innes of SPI Asset Management said in a commentary.

"The final week of key US economic releases for the year contained more lumps of coal than holiday presents in the stocking, hinting that it is dead slow ahead as all signs point to slower growth next year."

China's surging Covid-19 cases also pose a concern but with the country's National Health Commission saying on Sunday that it would no longer publish daily case numbers, assessing the impact of the pandemic on the world's second-largest economy would be even more complicated for investors.

Oil prices had surged more than two percent on supply concerns Friday after a senior official said Russia could cut up to seven percent of its production next year but trade was suspended for a holiday on Monday. 

The yen climbed slightly against the dollar with the Bank of Japan mulling an interest rate hike next year after an unexpected adjustment last week to monetary policy.