Asian stock markets saw mostly positive movements on Thursday, buoyed by a surge in U.S. stocks to record highs following the Federal Reserve's announcement of anticipated interest rate cuts later in the year.
Japan's key stock index, the Nikkei 225, soared by 2.0% to close at an unprecedented level of 40,815.66, propelled by a report indicating an almost 8% increase in exports in February compared to the previous year, marking the third consecutive month of growth. Notably, exports of automobiles and electrical machinery contributed to narrowing the trade deficit to around half of its level from a year ago, standing at 379 billion yen ($2.5 billion).
In Hong Kong, the benchmark index surged by 2%, closing at 16,879.68, while the Shanghai Composite in China experienced a marginal decline of less than 0.1%, ending at 3,077.11, following the announcement of fresh measures by the Chinese government aimed at supporting the economy.
Meanwhile, Sydney's S&P/ASX 200 rose by 1.1% to 7,782.00, and South Korea's Kospi gained 2.4% to reach 2,754.86.
On Wednesday, the S&P 500 achieved a 0.9% increase, reaching a new all-time high of 5,224.62 for the second consecutive day. Year-to-date, it has already seen a 9.5% gain, outperforming the average annual increase observed over the past two decades.
The Dow Jones Industrial Average also rose by 1% to 39,512.13, while the Nasdaq composite surged by 1.3% to 16,369.41, with both indices hitting record levels.
Initial concerns among investors about potential adjustments to the Fed's projected rate cuts were alleviated following the release of a survey indicating that the median expectation among policymakers remains unchanged, with three rate cuts anticipated in 2024. This reaffirmed investor confidence in the stock market, as the prospect of rate cuts has been a key factor driving record-high prices.
Federal Reserve Chair Jerome Powell reiterated the likelihood of rate cuts later in the year, emphasizing the need for further confirmation that inflation is trending towards the target of 2%. The Fed faces a delicate balance, with the risk of both reigniting inflation by cutting rates too early and exacerbating economic downturns by acting too late.
In response to the Fed's announcement, there was mixed movement in Treasury yields, with the two-year yield initially rising before retracing its gains. However, the 10-year Treasury yield experienced fluctuations before settling at 4.28%.
In the commodity markets, benchmark U.S. crude oil rose to $81.68 a barrel, while Brent crude, the international standard, reached $86.45 a barrel. The U.S. dollar saw a slight decline against the Japanese yen, trading at 150.96 yen, and a modest increase against the euro, reaching $1.0935.
Paraphrasing text from "ABC News" all rights reserved by the original author.
