Asian stocks rally on Fed rate cut bets

Asian stocks rose on Thursday, following Wall Street’s tech-driven rally after US consumer inflation data met expectations, reinforcing expectations of a Federal Reserve rate cut next week.

Japan’s Nikkei index, a key market barometer, soared above the 40,000 mark for the first time since mid-October. This significant milestone was fuelled by gains in the chip sector and a weakening yen.

Additionally, the Australian dollar strengthened considerably after robust employment data, recovering from recent losses triggered by concerns over potential yuan depreciation.

On the other hand, China’s yuan stabilised above a one-week low, supported by the central bank’s official fixing.

Overnight in the US, the tech-heavy Nasdaq Composite surged 1.8 per cent, crossing the 20,000 mark, while the S&P 500 climbed 0.8 per cent.

The US CPI data, which showed a 0.3 per cent increase in November, was perceived positively by the market, as it eased concerns about further monetary tightening.

The Nikkei rose 1.5 per cent and the Topix climbed 1.2 per cent. South Korea’s KOSPI added 0.7 per cent and Taiwan’s benchmark gained one per cent.

Hong Kong’s Hang Seng advanced 0.4 per cent and mainland blue chips were 0.2 per cent higher.

The Nasdaq surged 1.8 per cent to close above 20,000 for the first time, while the S&P 500 rose 0.8 per cent. Futures for both indexes indicated 0.2 per cent declines.

Gold prices reached a one-month high of $2,725.79 before settling at $2,710.45.

US crude remained near a 2 1/2-week peak due to concerns about potential sanctions affecting Russian oil production. West Texas Intermediate crude traded at $70.20 per barrel, while Brent crude was at $73.49 a barrel.

Attribution: Reuters

Subediting: M. S. Salama