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Asian stocks surge as Fed rate cut bets offset China fears

Published Dec 05, 2023 10:11PM ET
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Investing.com-- Most Asian stocks rallied on Wednesday as weak U.S. labor market indicators fueled more bets that the Federal Reserve had limited room to keep interest rates higher, helping investors look past a warning on China’s economy.

JOLTs data showed job openings fell more than expected in October, pointing to some cooling in the labor market. The reading spurred a rise in bets for a March rate cut by the Fed, with traders now pricing in a nearly 54% chance of a 25 basis point cut.

U.S. Treasury yields also sank after the reading, benefiting global technology shares. The JOLTs reading came just days before key nonfarm payrolls data for November, which is set to offer clearer cues on the labor market this Friday.

Japan’s Nikkei 225 index was among the best performers in Asia, rising 1.7% on outsized gains in manufacturing and technology stocks. The index broke a three-day losing spree, as strength in the yen kept export-heavy stocks under pressure.

Australia’s ASX 200 index rose 1.4% even as data showed the country’s economy grew less than expected in the third quarter. But the data showed that some facets of the economy- particularly domestic demand and spending- remained robust, which helped offset an outsized decline in exports.

South Korea’s KOSPI added 0.5%. Shares of media group YG Entertainment Inc (KQ:122870) rallied over 20% after it said it had signed a renewed contract with all four members of the wildly popular girl group Blackpink.

Chinese stocks creep higher, but Moody’s warning sours mood

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose slightly on Wednesday, while strength in tech stocks helped push Hong Kong’s Hang Seng index about 0.6% higher.

But all three indexes were nursing steep year-to-date losses, and have vastly underperformed their Asian peers this year.

Sentiment towards Asia’s biggest economy was dealt a fresh blow on Tuesday after ratings agency Moody’s downgraded its outlook on China’s credit to negative, and flagged increasing economic risks from a property market meltdown and a lack of clear policy support from Beijing.

Recent purchasing managers index data from China also showed that business activity remained under pressure. Focus is now on trade data from the country, due on Thursday, for more cues on the economy.

Indian stocks reach $4 trillion valuation on election cheer, strong GDP

Futures for India’s Nifty 50 index pointed to a strong open, with the index set to extend gains after closing at a record high for two straight sessions. The Nifty was now in sight of 21,000 points.

The latest rally in Indian stocks was triggered by the ruling party BJP clocking victories in three crucial state elections, which set it up for probable reelection in the 2024 general elections. Investors have largely welcomed the business-first policies rolled out by the BJP in their nearly 10 years in power.

The rally saw India’s overall stock market valuation cross $4 trillion, putting the world’s fifth-biggest equity market within sight of no. four market Hong Kong.

Sentiment towards India was also spruced up by a stronger-than-expected GDP figure for the September quarter, which showed that the world’s fastest-growing major economy largely ducked a downturn in global economic conditions.

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Asian stocks surge as Fed rate cut bets offset China fears
 

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Comments (3)
Tommy Rommazontz
Tommy Rommazontz Dec 06, 2023 2:24AM ET
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Where do these headlines come from? crazy
Steve Bojo
Steve Bojo Dec 06, 2023 1:27AM ET
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Rate cut? There won’t be one.
perplexed76 .
perplexed76 . Dec 05, 2023 11:54PM ET
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It's beyond me why it's impossible to ensure 3% for real business and give money under 10% to market parasites.
 
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