AP – Asian benchmarks were mostly higher yesterday after United States (US) stocks rallied to records following the Federal Reserve’s (Fed) indication that it expects to deliver interest rate cuts later this year.
Japan’s benchmark Nikkei 225 jumped 2.0 per cent to finish at a record high 40,815.66 after the government reported exports grew nearly eight per cent in February from a year earlier, in the third straight month of increase.
Shipments of cars and electrical machinery increase, helping to trim the trade deficit to about half of what it was a year earlier, at JPY379 billion (USD2.5 billion).
Hong Kong’s benchmark also surged two per cent, to 16,879.68, while the Shanghai Composite fell less than 0.1 per cent, to 3,077.11, after the Chinese government announced fresh measures to support the economy.
Sydney’s S&P/ASX 200 added 1.1 per cent to 7,782.00. South Korea’s Kospi gained 2.4 per cent to 2,754.86.
On Wednesday, the S&P 500 jumped 0.9 per cent to 5,224.62, an all-time high for a second straight day. It’s already gained 9.5 per cent so far this year, a bit better than the average for a full year over the last two decades.
The Dow Jones Industrial Average jumped one per cent to 39,512.13 and the Nasdaq composite roared 1.3 per cent higher to 16,369.41. Both also hit records.
Some of Wall Street’s nervousness coming into the day washed away after the Fed released a survey of its policy makers, which showed the median still expects the central bank to deliver three cuts to interest rates in 2024.
That’s the same number as they had penciled in three months earlier, and expectations for the relief that such cuts would provide are a big reason US stock prices have set records.
The fear on Wall Street was that the Fed may trim the number of forecasted cuts because of a string of recent reports that showed inflation remaining hotter than expected.
The Fed has been keeping its main interest rate at its highest level since 2001 to grind down inflation.
High rates slow the overall economy by making borrowing more expensive and by hurting prices for investments.
