Asian Stocks Rally on Fed Rate Cut Cheer, China Caution Persists
Investing.com– Most Asian Stocks Rise on Fed Announcement
Asian stocks rose sharply on Thursday following the Federal Reserve’s decision to halt interest rate hikes and consider rate cuts in 2024. However, concerns over China’s economic slowdown tempered the gains.
Australia’s ASX Top Performer for the Day
Australia’s ASX was among the top performers for the day, surging 1.6% on the back of strong performances by banks and commodity stocks.
South Korea’s KOSPI Surges 1.1%
South Korea’s KOSPI surged 1.1%, driven by a rise in technology stocks tracking an overnight slump in U.S. Treasury yields. Hong Kong’s Hang Seng index also added 0.9% despite weakness in mainland stocks.
Asian Markets React to Fed Announcement
Broader Asian markets also rose after the Federal Reserve announced its potential rate cuts in 2024. Traders are now pricing in a greater chance of rate cuts by as soon as March 2024.
Positive Cues for Asian Markets
A strong U.S. dollar and the S&P 500 closing at a record high provided positive cues to Asian markets, with the prospect of lower interest rates boding well for the region.
India’s Nifty Index Points to Positive Open
Futures for India’s Nifty index pointed to a positive open, with optimism over the Indian economy driving the rally.
Japan’s Nikkei Falls Amid Profit Taking
On the other hand, Japan’s Nikkei index fell 0.6% as profit taking ensued after three straight days of gains. Persistent concerns over a slowdown in China also weighed on the market.
Chinese Stocks Lag with Caution Before Economic Cues
China’s bluechip index hovered near five-year lows, while the Shanghai Composite Index traded sideways. Sentiment towards China remained on edge after data showed the country slipping further into deflation in November.
Focus on Economic Data for More Cues
Focus is now on China’s industrial production and retail sales data for November, due this Friday, for more cues on Asia’s biggest economy.
Local markets took some support from local media reports stating that Beijing intended to loosen regulations for its National Social Security fund, allowing it to invest in pension products and certain options trade.
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