Asian stocks surge as Fed rate hike bets recede; China data on tap
Investing.com-- Most Asian stocks rose sharply on Monday as weaker-than-expected U.S. payrolls data furthered expectations that the Federal Reserve was done with its rate hike cycle, while focus also turned to upcoming economic readings from China.
Regional stocks have been on a tear since Thursday, after the Fed provided somewhat less hawkish signals than markets had feared, bumping up expectations of an end to any more hikes.
But weaker-than-expected nonfarm payrolls data on Friday was the biggest proponent of this notion, given that it signaled cooling in the U.S. jobs market, which has been a major pain point for the Fed.
Wall Street indexes surged after Friday's reading, providing a positive lead-in to Asian shares on Monday. Traders were pricing in a greater chance of no more rate hikes by the Fed, and that the central bank will begin trimming rates by mid-2024.
Technology-heavy indexes were the best performers for the day, tracking a sustained decline in the dollar and U.S. Treasuries. South Korea’s KOSPI rallied 3.8% to an over two-week high.
The KOSPI was also boosted by the South Korean government announcing a complete ban on short-selling in local markets. The move comes after the government slapped two global banks with record fines last month for naked short selling.
Japan’s Nikkei 225 jumped 2.2%, also taking support from data that showed the country’s services sector grew more than expected in October. The Nikkei was at an over one-month high, and was set for a fourth straight session of gains after the Bank of Japan also struck a dovish tone last week.
Key Japanese corporate earnings, from SoftBank Group Corp. (TYO:9984) and Sony Corp (TYO:6758), are also on tap this week.
Australia’s ASX 200 rose
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