Asian shares experienced mixed performance on Thursday, weighed down by weakness in Chinese markets despite a Wall Street rally fueled by expectations of potential Federal Reserve rate cuts.
The Federal Reserve maintained interest rates in a widely anticipated move but signaled the possibility of two quarter-percentage-point rate cuts by the end of the year. While inflation projections were revised upward, Fed Chair Jerome Powell reassured markets that tariff-induced inflation would be temporary, easing investor concerns.
Regional Performance:
- Australia: The ASX 200 index surged by 1%, boosted by the positive sentiment from Wall Street.
- Japan: Markets were closed for a holiday, though Nikkei futures edged up by 0.2%.
- U.S. Futures: Nasdaq futures gained 0.4%, while S&P 500 futures climbed 0.3%, reflecting extended optimism.
- Europe: EUROSTOXX 50 futures also rose by 0.1%.
Chinese Market Downturn:
- CSI300 Index dropped 0.66%, and the Shanghai Composite Index fell by 0.46%, reflecting profit-taking after a previous tech-driven rally.
- Hang Seng Index sank 1.5%, further adding to regional uncertainty.
- Beijing’s decision to maintain its benchmark lending rates for the fifth straight month met market expectations, while the yuan remained stable.
Currency and Commodities:
- The U.S. dollar fell 0.27% against the yen to 148.25, while the euro steadied near a five-month high at $1.0908.
- Gold prices surged to a record high of $3,055.96 per ounce amid expectations of further Fed easing.
- Oil prices saw moderate gains with Brent crude rising 0.5% to $71.13 per barrel and WTI crude increasing 0.36% to $67.40 per barrel, driven in part by Middle East tensions.
Outlook:
While global markets are finding solace in the Fed’s dovish stance, concerns about Chinese market volatility and ongoing geopolitical risks may continue to impact investor sentiment in the short term. Traders will closely monitor further economic data and central bank decisions for guidance on market direction.
