Asian Markets Extend Rally After Fed Cut

AFP/APP

Hong Kong : Asian stock markets continued their upward momentum on Friday, buoyed by a record-setting Wall Street performance and the Federal Reserve’s decision to lower interest rates.

Investors are also closely monitoring the potential for market-friendly policies under a second Trump administration, while awaiting a key stimulus package from Chinese officials.

On Thursday, the US Federal Reserve reduced its key interest rate by 25 basis points to 4.50–4.75 percent, following a 50-point cut in September.

Fed Chair Jerome Powell reassured markets that the central bank’s policy decisions would remain data-driven, regardless of the outcome of the US presidential election. Powell’s comments sparked optimism, especially with inflation moving closer to the Fed’s 2% target.

The S&P 500 and Nasdaq hit fresh all-time highs, driven by strong earnings reports from major tech companies, including Apple, Alphabet, and Meta. Asia followed suit in early trading, with stock indices in Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington, and Jakarta all registering gains.

Investors are also keeping an eye on Beijing, where Chinese officials are wrapping up a week-long meeting focused on finalizing a large-scale economic stimulus plan. Economists expect China to approve hundreds of billions of dollars in additional budget spending, aimed at supporting local governments and addressing bad loans at banks.

As US President Donald Trump heads toward a potential second term, there are concerns that his trade policies could heighten tensions with Beijing, particularly as he has previously suggested imposing tariffs of up to 60% on Chinese imports. However, markets seem to view the prospect of tax cuts and deregulation as positive for corporate profitability.

“While concerns about rising US-China tensions under Trump persist, there is optimism that his pro-business policies could stimulate growth,” said Michael Hewson, analyst at MCH Market Insights.

In currency markets, the US dollar rose slightly against the yen after falling in response to the Fed’s rate cut, while the euro and pound both edged lower against the dollar.

Key Market Figures (as of 0230 GMT):

• Tokyo (Nikkei 225): +0.3% at 39,515.36
• Hong Kong (Hang Seng): +0.6% at 21,084.10
• Shanghai (Composite): +0.6% at 3,490.75
• Euro/USD: $1.0789 (down from $1.0801)
• Pound/USD: $1.2975 (down from $1.2985)
• USD/JPY: ¥153.00 (up from ¥152.92)
• Crude Oil (WTI): $72.00/barrel (down 0.5%)
• Crude Oil (Brent): $75.35/barrel (down 0.4%)

As investors continue to digest the Fed’s move and watch the US election results, the outlook for global markets remains upbeat, though with uncertainty regarding the political landscape in both the US and China.