Asia-Pacific stocks rise on China stimulus hopes and Wall Street gains
Asian-Pacific stock markets experienced gains on Wednesday, as expectations for economic stimulus from China and Wall Street’s overnight gains boosted investor sentiment. The MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.7% in the morning, with China’s benchmark equity index increasing by 0.3% and Hong Kong’s Hang Seng adding 1.2%. This comes after China reportedly requested major banks to reduce deposit rates to support the economy. However, Japan’s Nikkei index slid by 1.1% after reaching a 33-year high on Tuesday.
“Overall, across the board, assets are doing pretty well,” said Yuting Shao, macro strategist at State Street Global Markets. “The US debt ceiling uncertainty (has been) removed (and) hope on China to introduce more help to the economy is also a good sign for the market.”
The US S&P 500 ended higher on Tuesday, with the Federal Reserve expected to maintain interest rates at its policy meeting next week. The two-year Treasury yield, which typically moves in step with interest rate expectations, fell slightly to about 4.5% in Tokyo, from Tuesday’s close at 4.516%. The yield on 10-year notes slipped to around 3.67%.
The US dollar index slipped by 0.04% to 104.03. The Australian dollar reached its highest since mid-May at A$0.6690, extending a rally following a central bank rate increase on Tuesday.
Oil prices steadied on Wednesday after the previous session’s losses, as demand concerns owing to slow global economic growth were offset by expectations of tighter global supply following Saudi Arabia’s pledge to deepen output cuts. US crude was flat at US$71.74 a barrel. Brent crude eased to US$76.25 per barrel.
Gold was slightly higher, trading at US$1,965.19 per ounce. Leading cryptocurrency bitcoin was trading at about US$27,000, consolidating following a sharp overnight rebound from as low as US$25,350. The token has been a paradoxical beneficiary of a US Securities and Exchange Commission (SEC) crackdown on cryptocurrency exchanges, and the classification of tokens including Solana, Cardano and Polygon as securities.
“The SEC is making life nearly impossible for several altcoins,” said Oanda senior market analyst Ed Moya. “And that is actually driving some crypto traders back into Bitcoin.”
