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Expectations of Rate Cut Drive Asian Stocks Higher



IMG7633Asian Markets

Reports from AFP indicated that, apart from Japan, most Asian stock exchanges were in positive territory on Thursday. Shanghai, Seoul, Sydney, Taipei, Wellington, Jakarta, Manila, Singapore, and Kuala Lumpur all posted gains.

Tokyo experienced a decrease of almost half a percent, impacted by a stronger yen driven by expectations surrounding the Fed’s monetary policy. The Japanese market was also affected by the expiration of the right to claim dividends for many shares, leading to an overall market decline.

Meanwhile, Hong Kong and Seoul led the regional gains in Asia, with the Hang Seng closing more than 2.5% higher.

On Wednesday, the Dow Jones Industrial Average led gains on Wall Street, rising 0.3% to reach another all-time high of 37,665.52.

In Europe, major markets opened higher on Thursday, with London, Frankfurt, and Paris showing positive starts.

While US inflation has slowed, it continues to exceed the Fed’s long-term target of around two percent. Analysts cautioned that consumer spending had not yet returned to healthy levels.

According to the Mastercard SpendingPulse survey, US retail sales over the crucial holiday shopping season increased by 3.1% year-on-year, a significant drop from the previous year’s 7.6% surge, reflecting a more cautious consumer and reduced retailer discounting due to improved inventory management.

Gold prices continued to rise after reaching record highs earlier in the month, touching $2,088.44 per ounce in Thursday’s trading before retreating.

Concerns in the oil markets persisted over the potential escalation of the Israel-Hamas conflict into a broader regional crisis and the ongoing attacks on vital Red Sea shipping lanes by Yemen’s Huthi rebels.

AFP reported on Wednesday that French shipping giant CMA-CGM resumed some transit through the waterway, while Danish group Maersk announced its intention to return, given the presence of a US-led naval coalition policing the maritime route. This news stabilized oil prices on Thursday, with both WTI and Brent futures trading within a relatively narrow range.