Asian stocks follow Wall St on hopes of a loosening of rate hikes
BEIJING (AP) — Asian stock markets followed Wall Street higher on Wednesday as hopes rose that the Federal Reserve could ease interest rate hike plans and Britain installed its third prime minister this year.
Shanghai, Tokyo, Hong Kong and Sydney won. Oil prices have fallen.
Wall Street’s benchmark S&P 500 rose after bond prices rose, suggesting some investors expect the Fed to ease rate hikes as economic activity cools.
Traders see falling U.S. house prices and other data as support for a “reminder” of Fed plans at its December meeting, Mizuho Bank’s Vishnu Varathan said in a statement. report.
Britain’s new prime minister, Rishi Sunak, warned on Tuesday of a “deep economic crisis”, but his arrival seemed to reassure markets shaken by his predecessor’s economic plans. The beaten pound rose slightly against the US dollar.
The Shanghai Composite Index rose 0.9% to 3,001.44 and the Hang Seng in Hong Kong gained 0.9% to 15,300.40.
The Nikkei 225 in Tokyo advanced 0.8% to 27,466.82 ahead of the expected release of a stimulus package this week that could exceed 20 trillion yen ($140 billion).
The Kospi in Seoul added 0.6% to 2,248.73. Sydney’s S&P-ASX 200 rose 0.2% to 6,810.90 after the government announced Australian inflation rose to 7.3% in the three months to September.
The New Zealand and Southeast Asian markets grew. Indian markets were closed for a holiday.
On Wall Street, the S&P 500 gained 1.6% to 3,859.11. The Dow Jones Industrial Average rose 1.1% to 31,836.74. The Nasdaq advanced 2.3% to 11,199.12.
Tech stocks, retailers and communications companies were among the main drivers.
Investors are looking at corporate earnings to see how inflation, which has been at multi-decade highs, is affecting consumer spending.
General Motors rose 3.6% after delivering strong results. United Parcel Service fell 0.3% after the parcel delivery service beat profit and revenue forecasts.
The 10-year Treasury yield, which influences mortgage rates, slipped to 4.09% from 4.23% late Monday. The two-year Treasury yield, which tracks Federal Reserve action, fell to 4.45% from 4.50% late Monday.
The Fed and other central banks raised interest rates to slow economic growth and reduce upward price pressure. Investors fear this could tip the global economy into recession.
Traders grew more confident that the Fed will cut its three-quarter rate hike plans to half a percentage point at its December meeting, according to CME Group.
The US economy is already slowing and even contracted in the first half of the year. The government will release its third quarter gross domestic product report on Thursday.
In energy markets, benchmark U.S. crude fell 63 cents to $84.69 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 74 cents to $85.32 on Tuesday. Brent crude, the price basis for international oil trade, fell 85 cents to $90.89 a barrel in London. It gained 26 cents the previous session to $93.52.
The dollar slipped to 147.58 yen from 147.97 yen on Tuesday. The euro rose to 99.70 cents from 99.66 cents.