Asian Markets Rebound as Tech Rally Spreads Optimism
Equities in Asia surged on Wednesday, building on the momentum from Wall Street’s tech-driven rally. The optimism was fueled by expectations of interest rate cuts from the Federal Reserve, which helped stabilize markets. In Australia and Japan, shares rose, while Hong Kong equity futures also gained after a sharp decline on Tuesday.
The tech-heavy Nasdaq 100 led the charge, advancing 1.6% on Tuesday, followed by the S&P 500, which rose 1%. Oil prices also increased, while the New Zealand dollar fell and bonds rose after the country’s central bank delivered a 50 basis-point cut to its benchmark rate.
China’s equity market remained in focus, with an index of US-listed Chinese shares plummeting 6.9% overnight. However, Premier Li Qiang’s comments late Tuesday indicated that Beijing is working to introduce policies to stabilize growth and expectations, which could boost investor confidence.
According to Timothy Moe, Goldman Sachs’ chief Asia Pacific equity strategist, the recent drop in Hong Kong stocks can be seen as a “clearing event” that purged excess expectations of stimulus from the market. This could pave the way for a floor to be established.
Elsewhere in Asia, India is set to unveil its rate decision later today, while South Korea will join FTSE Russell’s benchmark bond index, marking a significant milestone after months of campaigning and financial market infrastructure overhaul.
In the US, Treasury yields were little changed after steadying on Tuesday, ahead of inflation data due later in the week. Federal Reserve officials’ comments were parsed by investors, with some calling for careful and data-based rate cuts.
Key events this week include Fed minutes, speeches from Fed officials, and earnings reports from major Wall Street banks. Markets will be closely watching these developments for signs of further rate cuts and economic growth.
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