Asian markets experienced a mostly positive day, buoyed by tech stocks, following mixed trading on Wall Street. The surge comes in the wake of the Federal Reserve’s recently announced interest rate cut, which has had a significant impact on investor sentiment.
Japan’s Nikkei 225 index saw a notable increase, climbing 1.3% to 45,365.98. This rise was largely supported by tech stocks, with notable gains from companies like Disco, Tokyo Electron, and SoftBank. Meanwhile, the Bank of Japan commenced a two-day policy meeting, with expectations that interest rates will remain unchanged.
In South Korea, the Kospi index also recorded gains, rising nearly 1.3% to 3,455.98, aided by advances from major chipmakers such as SK Hynix and Samsung Electronics. Chinese markets displayed mixed results; Hong Kong’s Hang Seng dipped 0.2% to 26,856.02, while the Shanghai Composite index rose nearly 0.5% to 3,893.95, spurred by optimistic viewpoints regarding ongoing trade negotiations with the U.S. and potential discussions surrounding TikTok.
On the other hand, Australia’s S&P/ASX 200 saw a downturn of 0.5%, settling at 8,778.60. This decline followed the release of job market data indicating that the unemployment rate held steady at 4.2% for August, although overall employment dropped by 5,400, with full-time jobs decreasing by 40,900.
India’s BSE Sensex registered a 0.4% increase, while Taiwan’s Taiex gained 1.1%. On Wall Street, the previous day saw the S&P 500 index dip 0.1%, but it remained close to its all-time high reached earlier in the week. The Dow Jones Industrial Average, in contrast, rose by 260 points or 0.6%, while the Nasdaq composite experienced a decline of 0.3%.
The fluctuations in U.S. markets were influenced by the Federal Reserve’s decision to cut interest rates for the first time this year, a move that was largely anticipated by investors. Following the announcement, Fed officials provided projections indicating that further cuts are expected, with the majority suggesting the Fed will reduce the federal funds rate two more times by year-end and once more in 2026.
Despite the initial positive response to the Fed’s projections, markets moderated as Fed Chair Jerome Powell underlined the uncertainty surrounding economic conditions, cautioning against interpreting the projections as certainties. The ongoing challenge for the Fed is balancing a slowing job market against persistently high inflation levels, with Powell emphasizing that interventions aimed at one can adversely impact the other in the short term.
In other market activities, benchmark U.S. crude prices fell 10 cents to $63.95 per barrel, while Brent crude, the international benchmark, also dropped by 10 cents to $67.85 per barrel. The U.S. dollar strengthened, rising to 147.07 Japanese yen from 146.89 yen, while the euro slightly decreased to $1.1813 from $1.1818.
