Asian stocks rebounded from two days of losses on expectations the Federal Reserve may not need to raise interest rates aggressively next year. MSCI Inc.’s Asia Pacific equities index advanced 0.2%, led by technology shares. The gauge recovered after a semiconductor selloff pushed it to its lowest close since August on Tuesday. Chipmakers SK Hynix Inc. and Samsung Electronics Co. both gained more than 2% in Seoul trading.
The shift in sentiment followed comments from New York Fed President John Williams, who said he saw no need for further tightening in 2027, while continuing to view one more rate hike as appropriate this year. US equity-index futures also edged up in early Asian trading. Treasuries broadly held their gains, with the yield on the benchmark 10-year at 5.22% as traders looked ahead to Wednesday’s US consumer price inflation data.
Williams’ comments offered some relief ahead of the key inflation data, with markets concerned that elevated oil prices could keep price pressures persistent. Traders are also looking to earnings for clues on the direction of the artificial intelligence trade, which has come under pressure amid doubts that billions of dollars in spending will deliver commensurate returns. “The prospect of fewer Fed hikes should give Asian stocks some breathing room today,” said Josh Gilbert, lead Asia Pacific analyst at e Toro.
Elsewhere, US oil rose 0.9% to almost $95 a barrel, extending its advance to a fifth session, as a flare-up in Middle East attacks increased uncertainty over energy shipments from the Persian Gulf. Brent climbed 0.9% to $106.60. Gold slipped 0.1% to trade just below $4,160 an ounce. Chinese stocks risk sliding back into a bear market, with the CSI 300 Index down more than 15% from its June peak. Indian stocks also drew attention after Finance Minister Nirmala Sitharaman said she is keen to hear discussions around a transaction tax on share trading, and the Nifty 50 closed 1.6% higher. US stocks have proved resilient, with the S&P 500 not suffering a 1% decline in 53 trading sessions through Tuesday, its longest such stretch since January 2020.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing