China stocks just saw their best day of trading since 2008 amid a stimulus rally

Stocks in mainland China surged over 8% for its best day in 16 years while Japan's Nikkei 225 tumbled 4.8% on Monday as investors assessed key economic data from the two countries.

Mainland China's CSI 300 rallied 8.48%, powered by health-care and tech stocks and closing at 4,017.85. This marks a nine-day winning streak, its best day since September 2008 and its highest point since August 2023.

China's official purchasing managers' index reading for September came in at 49.8, better than the 49.5 expected by economists polled by Reuters. However, this marked a fifth straight month of contraction for the manufacturing sector in China.

The Caixin PMI survey, which is a private survey compiled by S&P Global, reported that the manufacturing PMI fell to 49.3 from 50.4 in September, lower than the 50.5 expected from the Reuters poll.

The Caixin survey also marked the fastest decline in the manufacturing in 14 months.

Hong Kong's Hang Seng index rose 3.09% as of its final hour, powered by consumer stocks. The Hang Seng Mainland Properties Index soared 8.11%.

Markets on the mainland will only be trading on Monday, before closing for the rest of the week due to the Golden Week holiday.

In Japan, the Nikkei closed at 37,919.55, led by losses in real estate stocks, while the largest loser on the index was department store holding company Isetan Mitsukoshi Holdings, down 10.64%. The broad-based Topix fell 3.47% and ended at 2,645.94.

Industrial production in the country dropped 4.9% year on year in August, more than the 0.4% fall in the month before.

On a month-on-month basis, industrial production dropped 3.3%, a sharper decline than the 0.9% expected in a Reuters poll and compared with the 3.1% rise in July

The Japanese yen weakened 0.13%