HONG KONG (AFP) – Equities mostly rose in Asian trade yesterday following another record day on Wall Street fuelled by inflation data that reinforced expectations for a United States (US) interest rate cut next week, while traders also remained hopeful for more measures to stimulate China’s economy.
Seoul’s Kospi pushed higher for a third straight day, eating further into the losses sustained in a sell-off that came in the wake of South Korean President Yoon Suk Yeol’s short-lived martial law declaration.
Hopes that the Federal Reserve will lower borrowing costs for a third time in a row next week were bolstered on Wednesday by figures showing the US consumer price index rising in line with expectations in November.
While the gauge continues to sit above the central bank’s two per cent target, swaps markets indicate there is a 98 per cent chance policymakers will make the reduction.
On Wall Street, the Nasdaq ended above 20,000 points for the first time, while the S&P 500 was a whisker away from its own record.
However, analysts warned the outlook for 2025 was less clear.
“Evidence in recent months suggests the decline in inflation has lost momentum while economic activity and the labour market have remained resilient,” said National Australia Bank senior forex strategist Rodrigo Catril.
“These dynamics suggest that after cutting in December, the Fed looks set to sit on the sidelines for a while with an increasing risk that the coming pause won’t be a couple of months, but rather a couple of quarters.”
Adding to the uncertainty is the presidency of Donald Trump, who takes back the White House next month and has pledged to slash taxes and regulations and ramp up tariffs – measures some warn could reignite prices.
In Asian trade, Hong Kong and Shanghai rallied as dealers kept an eye on China.
President Xi Jinping and other key officials were reportedly holding their Central Economic Work Conference to hash out plans to boost growth next year.
Shares in Seoul jumped more than one per cent as lawmakers prepare for a second impeachment vote on Yoon at the weekend after the first fell short on Saturday. The leader of his own party has urged members to attend the meeting and vote “according to their conviction and conscience”.
Still, the president remained defiant and vowed to “fight with the people until the very last minute”.
The won continues to hover around two-year lows of 1,430 per dollar amid the uncertainty sparked by the December 3 crisis.
Among other Asian markets, Tokyo gained more than one per cent on a weaker yen, while Singapore and Bangkok also rose. There were losses in Sydney, Wellington, Mumbai and Jakarta. Manila was flat.
The euro remained under pressure ahead of an expected rate cut by the European Central Bank later on Thursday, while France’s President Emmanuel Macron fights to appoint a new prime minister following the removal of Michel Barnier last week.
London rose at the open, along with Paris and Frankfurt.
