Asian shares opened mostly higher following a strong performance on Wall Street. While Hong Kong's Hang Seng fell, mainland Chinese markets rose after interest rate cuts, boosting hopes for economic recovery. US oil prices also climbed amid easing geopolitical concerns.
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Asian markets surge following Wall Street's record-breaking week
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- Asian markets rise, following Wall Street`s record highs.
- Chinese stocks gain after interest rate cuts boost economic hopes.
- Oil prices increase amid easing geopolitical concerns.
Asian shares opened mostly higher today after US stocks reached new records, capping off another successful week. US futures and oil prices also saw gains, according to AP.
In Hong Kong, the Hang Seng index was an exception, slipping 0.6 per cent to 20,869.39. In contrast, the Shanghai Composite gained 0.8 per cent to reach 3,288.32, while the A-share index in Shenzhen rose by 2.2 per cent.
These gains in mainland Chinese markets followed recent cuts in the one-year and five-year Loan Prime Rates, which serve as benchmarks for lending. According to AP, lower rates can alleviate pressure on borrowers, particularly property developers who have struggled since a crackdown on excessive borrowing a few years back. Zichun Huang of Capital Economics noted that with weak demand as the main issue, substantial government spending will be necessary. The Finance Ministry of China has committed to increasing such expenditures in the coming months. However, Huang expressed scepticism about whether these measures would lead to more than a modest and short-lived boost in activity.
In Tokyo, the Nikkei 225 index rose 0.3 per cent to 39,078.33, while Seoul's Kospi surged 0.8 per cent to 2,614.75. Australia's S&P/ASX 200 also increased, climbing 0.7 per cent to 8,340.40.
Oil prices have edged higher after experiencing a decline last week. AP reports that concerns had eased regarding a potential Israeli attack on Iranian oil facilities, which could disrupt exports to China and other countries. On early Monday, US benchmark crude was up by 38 cents, trading at USD 69.07 per barrel on the New York Mercantile Exchange. Brent crude, the international standard, rose by 31 cents to USD 73.37 per barrel.
The dollar weakened against the yen, falling to 149.23 Japanese yen from 149.57 yen late Friday. The yen has been under pressure lately due to expectations that the pace of interest rate hikes by the Bank of Japan may be slower than previously anticipated. The euro also dipped slightly, trading at USD 1.0865 compared to USD 1.0867.
On Wall Street, stocks logged more records on Friday. The S&P 500 rose 0.4 per cent, surpassing its previous all-time high to close at 5,864.67. The Dow Jones Industrial Average edged up by 0.1 per cent to reach 43,275.91, marking yet another record, while the Nasdaq composite climbed 0.6 per cent to 18,489.55.
Trading on Wall Street remained relatively calm, with AP noting that the S&P 500 celebrated its sixth consecutive winning week, the longest winning streak of 2024. Solid economic data has raised hopes that the US economy may avoid a painful recession while navigating the highest inflation levels seen in generations. With the Federal Reserve now cutting interest rates to support the economy, many optimistic investors believe stocks could continue to rise.
Netflix significantly contributed to the market’s upward momentum, soaring 11.1 per cent after the streaming giant reported stronger-than-expected profits for the latest quarter, despite a slowdown in subscriber growth. This increase offset a 5.2 per cent drop in CVS Health, which indicated that its quarterly profits would likely fall well below analysts' expectations.
Traders are now aligning around the expectation that the Federal Reserve will reduce its main interest rate by a quarter of a percentage point at its next meeting in November. According to AP, earlier predictions had suggested a more significant cut of half a percentage point, but positive economic updates have diminished those expectations. Currently, the federal funds rate sits in a range of 4.75 per cent to 5 per cent.
In Hong Kong, the Hang Seng index was an exception, slipping 0.6 per cent to 20,869.39. In contrast, the Shanghai Composite gained 0.8 per cent to reach 3,288.32, while the A-share index in Shenzhen rose by 2.2 per cent.
These gains in mainland Chinese markets followed recent cuts in the one-year and five-year Loan Prime Rates, which serve as benchmarks for lending. According to AP, lower rates can alleviate pressure on borrowers, particularly property developers who have struggled since a crackdown on excessive borrowing a few years back. Zichun Huang of Capital Economics noted that with weak demand as the main issue, substantial government spending will be necessary. The Finance Ministry of China has committed to increasing such expenditures in the coming months. However, Huang expressed scepticism about whether these measures would lead to more than a modest and short-lived boost in activity.
In Tokyo, the Nikkei 225 index rose 0.3 per cent to 39,078.33, while Seoul's Kospi surged 0.8 per cent to 2,614.75. Australia's S&P/ASX 200 also increased, climbing 0.7 per cent to 8,340.40.
Oil prices have edged higher after experiencing a decline last week. AP reports that concerns had eased regarding a potential Israeli attack on Iranian oil facilities, which could disrupt exports to China and other countries. On early Monday, US benchmark crude was up by 38 cents, trading at USD 69.07 per barrel on the New York Mercantile Exchange. Brent crude, the international standard, rose by 31 cents to USD 73.37 per barrel.
The dollar weakened against the yen, falling to 149.23 Japanese yen from 149.57 yen late Friday. The yen has been under pressure lately due to expectations that the pace of interest rate hikes by the Bank of Japan may be slower than previously anticipated. The euro also dipped slightly, trading at USD 1.0865 compared to USD 1.0867.
On Wall Street, stocks logged more records on Friday. The S&P 500 rose 0.4 per cent, surpassing its previous all-time high to close at 5,864.67. The Dow Jones Industrial Average edged up by 0.1 per cent to reach 43,275.91, marking yet another record, while the Nasdaq composite climbed 0.6 per cent to 18,489.55.
Trading on Wall Street remained relatively calm, with AP noting that the S&P 500 celebrated its sixth consecutive winning week, the longest winning streak of 2024. Solid economic data has raised hopes that the US economy may avoid a painful recession while navigating the highest inflation levels seen in generations. With the Federal Reserve now cutting interest rates to support the economy, many optimistic investors believe stocks could continue to rise.
Netflix significantly contributed to the market’s upward momentum, soaring 11.1 per cent after the streaming giant reported stronger-than-expected profits for the latest quarter, despite a slowdown in subscriber growth. This increase offset a 5.2 per cent drop in CVS Health, which indicated that its quarterly profits would likely fall well below analysts' expectations.
Traders are now aligning around the expectation that the Federal Reserve will reduce its main interest rate by a quarter of a percentage point at its next meeting in November. According to AP, earlier predictions had suggested a more significant cut of half a percentage point, but positive economic updates have diminished those expectations. Currently, the federal funds rate sits in a range of 4.75 per cent to 5 per cent.
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(With inputs from AP)
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