Asian stocks rise on expectations of Fed rate cut soon

Asian stock markets mostly rose in early trading on Monday, as renewed hopes for a possible US interest rate cut helped calm sentiment after a volatile week over concerns about a tech bubble.

An electronic board displays the KOSPI stock index at Hana Bank in Seoul, South Korea. Photo: THX/TTXVN

A wave of money pouring into AI-related assets has sent stocks soaring this year, sending many companies to record highs, including Nvidia last month becoming the first company to surpass $5 trillion in market capitalization. However, investors are increasingly concerned that the massive inflows into the sector may be overblown and take a long time to produce returns, raising warnings of a possible market correction.

Those worries have grown in recent weeks as expectations for a third straight Fed rate cut next month have receded, as persistent inflation continues to overshadow signs of labor market weakness.

However, risk appetite improved significantly last weekend (November 22), after New York Fed President John Williams said he still saw “room for further adjustment” at the December 9-10 policy meeting. This comment caused the probability of the Fed cutting interest rates to jump to about 70%, from the previous 35%.

Attention is now focused on this week's producer price index (PPI) report - one of the last major economic data before the Fed meeting, with many other reports delayed or not released due to the US government shutdown.

If PPI rises more than expected, it could raise concerns that inflationary pressures are still taking hold, limiting the Fed's ability to cut interest rates in December despite recent labor market weakness, said Fabien Yip of IG.

After a strong rally on Wall Street last weekend, Asian markets opened on a positive note. Liquidity was limited as Japan was closed for a holiday, but the MSCI Asia Pacific ex-Japan index rose 0.4%.

Hong Kong and Seoul, South Korea, jumped more than 1%, while Sydney, Singapore, Wellington and Taipei all rose. US stock futures also continued to rise.

The Shanghai Composite Index opened at 3,848.66 points, up 13.77 points (0.36%). The Hang Seng Index opened at 25,452.87 points, up 232.85 points (0.92%). In Seoul, South Korean stocks rose in the late morning, helped by chip and banking stocks as hopes of a Fed rate cut were revived. The KOSPI Index rose 42.86 points, or 1.11%, to 3,896.12 points at 11:20 a.m. (local time).

While market sentiment has eased since last week, uncertainty continues to weigh on risk assets. Bitcoin hovered around $87,000 per BTC - higher than its seven-month low of $80,553 per BTC, but still down sharply from last month's record of $126,200.

In the domestic stock market, in the mid-morning session of November 24, the VN-Index increased by 11.83 points (0.74%), to 1,666.77 points. The HNX-Index decreased by 0.59 points (0.22%), to 262.54 points.

Source: https://baotintuc.vn/thi-truong-tien-te/chung-khoan-chau-a-khoi-sac-truoc-ky-vong-fed-som-ha-lai-suat-20251124114813653.htm