A key measure of Asian stocks rose to its highest level since April 2022, powered by technology companies and the Federal Reserve’s supportive comments on the outlook for US interest-rate cuts.
The MSCI Asia Pacific Index advanced as much as 2.2%, the most since Nov. 15, with Taiwan Semiconductor Manufacturing Co., Toyota Motor Corp. and Samsung Electronics Co. among the biggest contributors to the move. The bullish session echoes US gains after Fed policymakers kept their outlook for three cuts in 2024 and moved toward slowing the pace of reducing their bond holdings, suggesting they aren’t alarmed by a recent rebound in price pressures.
Sentiment on Chinese tech stocks got a lift after Tencent Holdings Ltd. announced plans to more than double its stock buyback program and boosted dividends. The region’s semiconductor shares gained after Micron Technology Inc. gave a surprisingly strong revenue forecast for the current quarter, buoyed by demand for memory chips used in artificial intelligence applications.
“With the FOMC event risk out and market pricing roughly in line with dot plots, we think focus of Asian equity investors should return to earlier themes of AI momentum,” Chetan Seth, a strategist at Nomura Holdings Inc., wrote in a note. “We still expect a US soft landing.”
Still, mainland Chinese shares skipped the risk-on rally in the region, while Hong Kong’s Hang Seng Index closed 1.9% higher. Key benchmarks rose in Japan, South Korea and Taiwan. In Tokyo, the Nikkei 225 Stock Average closed at a fresh record high as country’s exports grew for the third consecutive month.
Sectors to Watch
Chinese brain implant technology-related stocks rise after Elon Musk’s Neuralink livestreamed an update with its first brain implant patient Wednesday, showing a quadriplegic man who was able to play video games and online chess using his mind.
Shares of Chinese companies active in the “low-altitude economy” extend their rally after a policy meeting Wednesday. Citic sees great potential in the industry.
Stocks related to Kimi chatbot, an AI product built by Moonshot AI, jump after a surge in visits.
Asian memory chip-related stocks rise after Micron Technology gave a surprisingly strong revenue forecast for the current quarter, buoyed by demand for artificial intelligence hardware.
Markets at a Glance
MSCI Asia Pacific Index rises 2%
Japan’s Topix Index rose 1.6%; Japan’s Nikkei Index rose 2%
China’s CSI 300 Index fell 0.1%; Hong Kong’s Hang Seng Index rose 1.9%; Hong Kong’s Hang Seng China Enterprises Index rose 1.7%
Taiwan’s Taiex Index rose 2.1%
South Korea’s Kospi rose 2.4%; South Korea’s Korea Stock Exchange KOSPI 200 Index rose 2.8%
Australia’s S&P/ASX 200 Index rose 1.1%; New Zealand’s S&P/NZX 50 Gross Index rose 0.7%
India’s NSE Nifty 50 Index gains 0.8%
Singapore’s Straits Times Index rose 1.2%; Malaysia’s KLCI rose 0.4%; Philippine’s PSEi rose 1.6%; Indonesia’s JCI rose 0.1%; Thailand’s SET Index rose 1%; Vietnam’s VN Index rose 1.3%
The yield on 10-year Treasuries declines 3.6 bps to 4.24%
West Texas Intermediate crude falls 0.2% to $81 a barrel
Bloomberg Dollar Spot Index rises 0.1%
Euro falls 0.2% to $1.09
Here Are the Most Notable Movers
Japanese department store operator Isetan Mitsukoshi rises to a record high. Nomura recommends the stock, saying the company is working to cut expenses, and that it will benefit from expected increase in demand for high-end goods.
Pop Mart surges the most since December 2022 after Jefferies upgraded the Chinese toy-wholesale company to buy from hold, citing “strong momentum” and monetization opportunities in intellectual property.
XPeng shares drops 6.5% in Hong Kong after a Alibaba unit was said to have raised $317 million from the sale of about 33 million US-traded shares of the Chinese electric vehicle maker.
Webjet jumps to the highest price since February 2020 after the Sydney-listed travel company’s WebBeds hotel distribution unit said it is on track to deliver A$5 billion TTV in FY25, according to an investor presentation filed to the exchange.
Related Market News
Taking Stock: Chinese oil majors may be in the last phase of this year’s rally as investors pivot to growth stocks, while volatile crude prices create an earnings risk for the sector.
Global Wrap: Global stocks rallied to all-time highs, with tech and commodity stocks leading the charge in Europe, as traders grew more confident on the path for lower interest rates.
Inside Asia: Most Asian currencies are stronger against the dollar, buoyed by indications on the Federal Reserve’s rate-cut trajectory. Won outperforms all peers amid better early export growth data.
Options
VIX Edges Up Ahead of Fed With Stocks Steady: Options Snapshot
Hedge Funds Buy AUD Call Options on Job Data Surprise: Traders
MRF, Maruti Suzuki, Astral, Navin Fluorine: India Options Wrap
USD/JPY Downside Premium Jumps After Nikkei Report: FX Options
Notes From the Sell-Side
US equities were poised to build on Wednesday’s powerful gains after the Federal Reserve signaled expectations for three rate cuts this year and said inflation eased substantially.
UK equities are so cheap that sky-high takeover premiums are becoming the rule rather than the exception, yet targets are pushing back.
Any correction in the Indian equity market presents “buying opportunities” given the country’s growth potential, according to Christopher Wood, Jefferies global head of equity strategy.
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