AP – Shares mostly gained in Asia yesterday after United States (US) stocks capped a mostly dismal week with a broad rally that still left the benchmark S&P 500 down two per cent for the week.
US futures and oil prices advanced.
One shadow over markets was cleared when US lawmakers passed a budget deal in the early hours of Saturday, narrowly averting a pre-Christmas government shutdown.
Tokyo’s Nikkei 225 index jumped 1.3 per cent to 39,201.48, while the dollar was trading at JPY156.65, up from JPY156.48.
Honda Motor Co and Nissan Motor Corp held a news conference yesterday as reports speculated on a possible merger between Japan’s second and third-largest automakers.
Honda’s shares, which fell after news of the talks on a deal surfaced last week, were up 2.3 per cent. Nissan’s, which had soared, rose 0.5 per cent. Elsewhere in Asia, Hong Kong’s Hang Seng gained 0.7 per cent to 19,857.37, while the Shanghai Composite index slipped 0.1 per cent to 3,363.01.
Australia’s S&P/ASX 500 jumped 1.7 per cent to 8,201.60.
South Korea’s Kospi added 1.5 per cent to 2,441.82 and Taiwan’s Taiex jumped 2.6 per cent, with TSMC, the world’s biggest computer chip maker, gaining 4.4 per cent. Hon Hai Precision Industry, which reportedly has been manoeuvering to buy a big stake in Nissan, jumped 3.8 per cent.
In Bangkok, the SET advanced 0.4 per cent.
Last Friday, the S&P 500 rallied 1.1 per cent, closing at 5,930.85. The Dow Jones Industrial Average jumped 1.2 per cent to 42,840.26 and the Nasdaq composite gained 1 per cent to 19,572.60.
Roughly nine of every 10 stocks in the S&P 500 rose.
Superstar stock Nvidia and other Big Tech companies led the market, which got a lift after a report said a measure of inflation the Federal Reserve (Fed) likes to use was slightly lower last month than economists expected. It’s an encouraging signal following recent reports suggesting inflation may be tough to get all the way down to the Fed’s two per cent goal from its peak above nine per cent.
The threat of higher inflation was one of the reasons Fed Chair Jerome Powell gave last week when the central bank hinted it may deliver fewer cuts to interest rates next year than it earlier expected.
That warning sent a shock through the stock market, which had run to 57 all-time highs this year amid the widespread assumption the Fed would deliver a string of cuts to rates into 2025. Now traders are largely betting on one, two or perhaps even zero next year, according to data from CME Group.
Critics had been warning stock prices were vulnerable to drops after running so high and that the market likely needed everything to go correctly to justify its stellar gains for the year.
