Asian Shares Gain As US CPI Boosts Stocks, Bonds: Markets Wrap
Asian equities rose after cooling US inflation data backed the case for Federal Reserve interest-rate cuts and calming tech jitters supported American stocks.
Shares in Japan and Australia climbed along with Hong Kong equity futures, following an 0.8% gain for the S&P 500 and a 1.5% rally for the Nasdaq 100 on Thursday.
US Inflation Data
US inflation took center stage as traders looked past data caveats tied to the recent government shutdown, focusing instead on the slowest increase in consumer prices since early 2021. The cooling print boosted investor confidence and bolstered Treasuries on renewed expectations of Fed rate cuts.
“November’s inflation undershoot has armed Fed doves with strong ammunition,” said Seema Shah, chief global strategist at Principal Asset Management. “Distortions can’t be ruled out, but the sharp drop in annual inflation leaves the Fed with little excuse not to respond to rising unemployment.”
Impact on Indian Markets
For Indian investors, the US inflation data and its impact on the Federal Reserve’s interest-rate decisions can have significant implications. To understand how to invest in US stocks from India, it’s essential to consider the global economic trends and their effects on the Indian stock market.
The Nifty index and Sensex index are closely watched by Indian investors, and any changes in the US market can influence these indices. Therefore, it’s crucial to stay updated on the latest stock market news and trends.
Geopolitics and Its Impact
Geopolitics remained in the spotlight. A proposed $11 billion arms sale from the US to Taiwan drew an angry response from China. Tensions with Venezuela and Russia supported oil prices.
The yen edged lower Friday ahead of a Bank of Japan interest rate decision. The central bank is forecast to raise its benchmark rate to the highest level in three decades.
Other Market News
Elsewhere in Asia, traders will be focused on Malaysia trade data, foreign direct investment in China and private sector credit in Australia.
On Thursday, a busy day for global monetary policy decisions saw German and UK bonds underperforming US peers after the European Central Bank and Bank of England issued hawkish signals on the outlook for their rate paths.
The bullish signals in stock and bond markets failed to help cryptocurrencies. Bitcoin traded around $85,000, slightly above the two-week low it touched in Thursday’s session. Gold and silver retreated Thursday after gains in the prior session.
US Market News
TikTok Chief Executive Officer Shou Chew told employees that the social media app’s parent company, ByteDance Ltd., signed binding agreements to create a US joint venture majority-owned by American investors.
Apple Inc. is making changes to its iOS software in Japan to comply with a new local law aimed at fostering competition, part of broader efforts by the iPhone maker to adapt to regulations around the world.
The New York Stock Exchange and Nasdaq Inc. said they won’t alter their trading schedules on Dec. 24 and Dec. 26 after President Donald Trump’s executive order to close the federal government on those days.
FedEx Corp. raised the low end of its full-year profit and sales outlook, signaling the company’s efforts to slash costs and streamline its delivery networks are bearing fruit as demand improves.
Market Moves
Some of the main moves in markets:
- S&P 500 futures were little changed as of 9:18 a.m. Tokyo time
- Hang Seng futures rose 0.6%
- Japan’s Topix rose 0.5%
- Australia’s S&P/ASX 200 rose 0.5%
- Euro Stoxx 50 futures rose 1%
- The Bloomberg Dollar Spot Index was unchanged
- The euro was unchanged at $1.1722
- The Japanese yen was little changed at 155.69 per dollar
- The offshore yuan was little changed at 7.0335 per dollar
- Bitcoin fell 0.1% to $85,494.34
- Ether rose 0.1% to $2,831.75
- The yield on 10-year Treasuries was little changed at 4.13%
- Japan’s 10-year yield was little changed at 1.970%
- Australia’s 10-year yield was little changed at 4.74%
- West Texas Intermediate crude fell 0.2% to $56.01 a barrel
- Spot gold fell 0.1% to $4,328.07 an ounce
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