GLOBAL MARKETS-Asia shares jump as investors anticipate smaller interest rate rises

By Ankur Banerjee

SINGAPORE, OCTOBER 27 (Reuters) – Asian stocks rose on Thursday on growing expectations that major central banks may begin to slow the pace of rate hikes in the coming months, while the dollar The retreat lifted the commodity and pushed Treasury yields lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.59% higher and set for a third straight session of gains. The index has fallen about 2% for the month.

Australia’s resource-intensive market share index rose 0.81%, while Japan’s Nikkei opened 0.09% lower.

China’s stock market opened 0.1% higher on Friday, with Hong Kong’s Hang Seng Index up 2.6% at the open.

Chinese stocks have had a volatile week, highlighted by a violent sell-off on Monday as global investors dumped Chinese assets, concerned that the new leadership of the Chairman Xi Jinping will put ideology before the economy.

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But investors’ growing expectations that the Federal Reserve, along with other central banks, could stave off their aggressive rate hikes helped ease investor jitters. investment and reduce the rise of the dollar.

“Growths are generally lower globally as expectations of central bank tightening have increased earlier,” said Taylor Nugent, a market economist at National Australia Bank in Sydney.

Nugent also noted that the Bank of Canada on Wednesday announced a smaller-than-expected rate increase of 50 percentage points and said it raised expectations that the Fed would begin to move into a higher rate hike. interest rates of similar size in December.

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US Treasury yields fell, helped by a weaker dollar and Fed expectations becoming less hawkish.

Meanwhile, earnings reports from Facebook’s parent company Meta Platforms Inc and Samsung Electronics Co Ltd on Wednesday raised fears of a recession after some of Europe’s biggest banks also warned of risks. The risk increases when the economy is in recession.

In money markets, the euro rose above $1 for the first time in five weeks, reaching a peak of $1.00935, as investors awaited a rate decision from the European Central Bank (ECB). ), with markets expecting the euro to raise interest rates by 75 bp. .

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The pound was trading at $1.1624, down 0.03% on the day after hitting an intraday high of $1.1645.

The yen was up 0.18% against the greenback at 146.09 per dollar.

The dollar slide has also helped push gold prices higher, with spot gold hitting a two-week high on Wednesday.

Oil prices continued to rise in early Asian trade on Thursday after gaining more than 3% in the previous session.

Brent crude oil futures were up 25 cents, or 0.3%, to $95.94 a barrel by 0015 GMT. U.S. West Texas Intermediate (WTI) crude rose 19 cents, or 0.2%, to $88.10.

(Reporting by Ankur Banerjee; Editing by Simon Cameron-Moore)


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