Mixed Outcomes in Asian Markets as US Rally Fuels Rate Speculation

Post by : Bianca Suleiman

Asian stock markets exhibited a mixed performance on Tuesday as investors reacted to Monday’s impressive rise in US equities, sparked by hopes for an impending interest rate cut from the Federal Reserve.

Tokyo’s Nikkei 225 showed minimal movement, edging up by a fraction, finishing at 48,644.92 after the holiday break. South Korea’s Kospi remained steady around 3,848.00, while Taiwan’s Taiex made significant gains of 1.4%.

Chinese markets continued their upward trend, with Hong Kong’s Hang Seng gaining 0.6% to reach 25,875.36, while Shanghai Composite increased by 1.1% to 3,880.22. E-commerce giant Alibaba's shares rallied by 2.4% ahead of its earnings announcement scheduled later today. In contrast, Australia's S&P/ASX slipped by 0.2% to 8,510.30.

In the US, markets enjoyed a robust surge on Monday, despite a shortened week due to Thanksgiving. The S&P 500 rose by 1.5% to 6,705.12, the Dow Jones added 0.4% to 46,448.27, and the Nasdaq surged 2.7% to 22,872.01. Technology and AI-related stocks powered the upward momentum, with Alphabet showing a remarkable 6.3% increase following excitement over its Gemini AI model, and Nvidia climbing by 2.1%.

Investors are now keenly observing the Fed’s next steps, with markets indicating an 85% probability of a rate cut in December, up from 71% last week. An upcoming report on US wholesale inflation, expected to show an annual rise of 2.6%, will significantly influence this decision. A higher-than-anticipated reading might temper expectations for another rate cut.

Commodity markets displayed signs of caution as well. US crude oil price dipped by 28 cents to $58.56 per barrel, while Brent crude fell by 33 cents to $62.39. In currency markets, the dollar dipped slightly to 156.81 yen, and the euro decreased to $1.1517. Bitcoin also saw a retreat, down 1.1% to $88,200, having dipped from nearly $125,000 last month.

Global investors now navigate a complex balance between optimism for a relaxed US monetary policy and wariness over inflation pressures, all while keeping a close eye on the fluctuating landscape of technology and AI markets.