Asian stocks rise tracking Wall St rally; China losses persist
Investing.com-- Most Asian stocks rose on Wednesday, tracking a rally on Wall Street as investors cheered the prospect of early interest rate cuts by the Federal Reserve, while Chinese shares lagged on a bleak economic outlook.
A strong overnight finish on Wall Street — which put U.S. stock indexes within spitting distance of fresh record highs- showed that a post-Federal Reserve rally still had some legs, especially as investors remained convinced the central bank could begin trimming rates by as soon as March 2024.
This sentiment spilled over into Asian markets, helping regional bourses extend recent gains.
Australia’s ASX 200 index jumped 1.1% to its highest level since April 2022, while a rebound in video game stocks- particularly heavyweight Tencent Holdings Ltd (HK:0700)- saw Hong Kong’s Hang Seng index add 1.2%.
Futures for India’s Nifty 50 index pointed to a positive open, as the index remained in sight of record highs. The index was also among the top performing bourses in Asia for 2023, up nearly 18%.
Japan’s Nikkei 225 was among the top gainers for the day, up 1.1%. The index was also boosted by the summary of opinions of the Bank of Japan’s December meeting showing that members of the central bank saw monetary policy remaining ultra-loose for the time being.
A dovish BOJ and signs of some resilience in the Japanese economy saw local stocks stage a stellar rally this year. The Nikkei was the best-performing stock index in Asia through 2023, up 30% and also outperforming most of its global peers. In comparison, the S&P 500 was trading up about 24% for 2023.
Still, whether the Nikkei could extend its outperformance into 2024 remained in question, especially as the BOJ signaled that it will eventually begin
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