Asian stocks up on Fed rate cut hopes
Asian equity markets rallied on Thursday, fuelled by rising expectations that the US Federal Reserve will cut interest rates in September, Reuters reported.
The euro also advanced in anticipation of a similar move by the European Central Bank (ECB) later today.
The shifting stance of the Fed, potentially turning dovish, boosted oil prices and sent US Treasury yields tumbling to their lowest levels in two months.
This followed economic data released earlier this week suggesting a possible slowdown in the US labour market.
Market movers
- MSCI’s broadest index of Asia-Pacific shares outside Japan (excluding Japan) surged 1.14 per cent, led by gains in technology stocks. The index is on track for a 2.7 per cent weekly gain, snapping a two-week losing streak.
- Japan’s Nikkei rose one per cent.
- China’s blue-chip CSI 300 index added 0.38 per cent, while Hong Kong’s Hang Seng climbed 0.81 per cent.
- Indian markets are set for a quiet opening as Prime Minister Narendra Modi secured a third term with a coalition government, sparking concerns about reforms and unsettling investors.
US market records
The S&P 500 and Nasdaq indexes closed at record highs on Wednesday. Artificial intelligence leader Nvidia became the world’s second-most valuable company, surpassing Apple in market capitalisation after breaching $3 trillion.
Benchmark 10-year US Treasury note yields fell to 4.2750 per cent in Asian trading hours, the lowest level since April 1.
The dollar weakened broadly, with the yen strengthening to near a two-week high against the dollar.
The euro gained ground against the dollar, approaching a two-and-a-half-month high ahead of the ECB meeting. The ECB is widely expected to cut interest rates and acknowledge progress in its fight against inflation, while emphasising the continued battle.
Crude oil futures advanced, with Brent crude climbing 0.48 per cent to $78.79 a barrel and US West Texas Intermediate crude rising 0.66 per cent to $74.55.
