Asian stocks surge as markets bet on peak Fed rates, China stimulus
Investing.com — Most Asian stocks rose sharply on Tuesday amid expectations that the Federal Reserve was close to concluding its rate hike cycle for the year, while the prospect of more stimulus measures from China also aided sentiment.
Comments from several Fed officials this week suggested that while the central bank will still hike rates further in the coming months, it will have limited headroom to keep doing so. Weak labor market data also furthered this notion.
A swathe of weak economic readings from China spurred increased bets that Beijing will roll out more stimulus measures to help support a slowing economic recovery. Inflation data on Monday showed that consumer spending was on the brink of deflation, sending largely bearish signals on Asia’s largest economy.
Technology-heavy indexes were the best performers in Asia for the day, with Hong Kong’s Hang Seng index rallying 1.6% on strength in heavyweights Baidu Inc (HK:9888) (NASDAQ:BIDU), Alibaba Group (HK:9988) (NYSE:BABA), and Tencent Holdings Ltd (HK:0700). The trio rose between 1.7% and 2.5%, extending gains from the prior session.
In addition to the prospect of a Fed pause, Asian technology stocks were also aided by easing Chinese scrutiny towards the country’s biggest internet firms. Beijing had last week imposed record-high fines on Alibaba’s Ant Group and Tencent, but investors took this as a sign that the country was now done with its regulatory crusade against its technology giants.
Other tech-heavy bourses also rallied, with South Korea’s KOSPI and the Taiwan Weighted index up 1.4% and 1.2%, respectively.
Japan’s Nikkei 225 index rose 0.3%, while the broader TOPIX added 0.1%.
Chinese real estate stocks, including Country Garden Holdings (HK:2007)
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