TOKYO (AP) — Asian stocks rallied on some weak economic data after growing hopes the Federal Reserve would ease its aggressive rate hikes. shares rose on Tuesday.
Japan’s benchmark Nikkei 225 rose 2.8% to 26,959.25 in afternoon trading. South Korea’s Kospi he was up 2.5% to 2,209.98.
Australia’s S&P/ASX 200 rose 3.8% to 6,699.30 after the central bank raised the benchmark rate for the sixth straight month to a nine-year high of 2.6%. The Reserve Bank of Australia’s quarter percentage point increase in cash rate was smaller than at the recent monthly meeting.
When the bank raised interest rates by a quarter of a percentage point at its May board meeting, it was the first rate hike in over 11 years. It has now reached its highest level since the bank cut interest rates from 2.75% to 2.5% in August 2013.
Markets in Hong Kong and Shanghai were closed for public holidays.
“Asian stocks were positive on Tuesday after the correction session as traders focused on potentially oversold market conditions,” ActiveTrade’s Anderson Alves said in a note.
On Monday, Wall Street had its best day in months at a broad bailout rally after unexpectedly weak data on the economy made it more likely the Fed wouldn’t need to be so aggressive about raising rates. soared to
The S&P 500’s 2.6% rise to 3,678.43, its highest since July, is the latest move in the scattershot market, which has largely fallen this year on fears of a possible global recession.
The Dow Jones Industrial Average rose 2.7% to 29,490.89 and the Nasdaq Composite rose 2.3% to 10,815.43.
Equities have taken their cues from the bond market, with lower yields easing some of the pressures that have gripped the market this year. Yields on 10-year US Treasuries, which help set rates on mortgages and many other types of loans, fell to 3.62% from 3.83% late Friday. After starting at just 1.51%, he climbed to 4% last week.
A report on US manufacturing was weaker than expected, with data pointing to a decline in construction spending in July-August. While this may seem discouraging, it could mean that the Federal Reserve can moderate interest rate hikes to curb the high inflation that is hurting household budgets.
By raising interest rates, the Fed is making it more expensive to buy a house, a car, or just about anything you buy on credit. The hope is to slow the economy just enough to dry up the purchase inflation needed to keep prices rising rapidly.
The Federal Reserve (Fed) recently raised its key overnight interest rate to a range of 3% to 3.25% from near zero in March. Most traders expect it to rise by more than 1 point by early next year.
But as central banks around the world hike interest rates en masse, financial markets are under increasing stress and corporate earnings are weakening.
Two-year Treasury yields, which more closely track expectations for Federal Reserve (Fed) action, fell to 4.11% from 4.27% on weaker-than-expected reports on the economy.
It’s not just stocks, lower interest rates boost prices of everything from cryptocurrencies to gold.
Equities of high-growth companies, especially risky or high-value investments, are most affected by changes in interest rates. Bitcoin rallied on Monday after a temporary yield relief, and tech stocks made the heaviest move to carry the S&P 500. Apple and Microsoft both rose more than 3%.
Monday’s rally came even as Tesla, one of Wall Street’s most influential stocks due to its huge market cap, fell 8.6%. The electric car maker sold fewer units from July to September than investors had expected.
An update on the US job market will be released on Friday. The jobs report is one of Wall Street’s most anticipated data each month, along with reports on inflation.
It will be the last jobs report before the Fed makes its next interest rate decision scheduled for November 2nd. If the strength continues, the Fed will have room to continue raising rates. The most likely move, according to traders, is his four consecutive rises of three-quarters of a percentage point, equivalent to three times his normal move.
In energy trading, benchmark US crude rose 23 cents to $83.86 a barrel. Oil surged Monday amid speculation that major oil producers could soon announce production cuts. Shares of energy producers surged. ExxonMobil rose 5.3% and Chevron 5.6%. International benchmark Brent crude rose 42 cents to $89.28 a barrel.
In currency trading, the US dollar rose from ¥144.81 to ¥144.84. The euro was 98.28 cents, down slightly from 98.40 cents.
Yuri Kageyama’s Twitter https://twitter.com/yurikageyama
suggest a fix
https://wgnradio.com/news/business-news/ap-asian-shares-rise-after-relief-rally-on-wall-street/ Asian stocks rise after ‘relief rally’ on Wall Street WGN Radio 720