Asian Markets Rise Following Record Close on Wall Street

BANGKOK (AP) — Asian shares began the day mostly higher after U.S. stock markets reached new record highs to conclude another successful week. U.S. futures and oil prices also saw an upward trend.

Among the markets, Hong Kong’s Hang Seng index diverged from the positive trend, decreasing by 0.6% to 20,869.39. In contrast, the Shanghai Composite rose 0.8% to 3,288.32, while the A-share index in Shenzhen increased by an impressive 2.2%.

The rise in mainland Chinese markets followed recent reductions in the one-year and five-year Loan Prime Rates, which are crucial reference points for lending. These lowered rates can relieve financial pressures on borrowers, particularly property developers who faced challenges after a crackdown on excessive borrowing in previous years.

According to Zichun Huang of Capital Economics, since weak demand remains a primary concern, significant government spending will be necessary to stimulate the economy. China’s Finance Ministry has indicated plans to increase these expenditures in the coming months. However, there are doubts about whether such fiscal measures will be sufficient to produce anything beyond a modest and short-lived boost in activity.

Meanwhile, Tokyo’s Nikkei 225 index saw a rise of 0.3% to 39,078.33, and in Seoul, the Kospi index surged by 0.8% to 2,614.75. Australia's S&P/ASX 200 increased by 0.7% to 8,340.40.

In the commodities market, oil prices recovered slightly after falling the previous week amid diminishing fears regarding a potential Israeli strike on Iranian oil facilities, which could have had significant implications for crude exports. Early Monday, U.S. benchmark crude was up by 38 cents to $69.07 per barrel in electronic trading on the New York Mercantile Exchange. The international benchmark, Brent crude, rose by 31 cents to $73.37 per barrel.

In currency markets, the dollar declined to 149.23 Japanese yen from 149.57 yen late Friday, largely due to indications that the Bank of Japan may slow down the pace of its interest rate hikes. The euro also slipped slightly to $1.0865 from $1.0867.

On Wall Street, Friday saw the S&P 500 index increase by 0.4%, surpassing its all-time high set earlier that week, closing at 5,864.67. The Dow Jones Industrial Average gained 0.1% to an all-time record of 43,275.91, while the Nasdaq composite climbed 0.6% to 18,489.55.

Overall trading on Wall Street remained relatively stable, highlighting the S&P 500's sixth consecutive winning week, marking its longest winning streak of 2024. Positive economic data has fueled hopes that the U.S. economy can avoid a severe recession while overcoming substantial inflationary pressures. With the Federal Reserve now lowering interest rates to spur continuous economic growth, many investors are optimistic about further stock market gains.

A significant contributor to market performance was Netflix, whose stock soared by 11.1% after reporting quarterly profits that exceeded analysts' expectations, despite a slowdown in subscriber growth.

This performance helped balance out a 5.2% decline in CVS Health, which announced it is likely to report profits well below analysts' forecasts for the quarter.

Market traders are now consolidating their expectations that the Federal Reserve will implement a quarter-percentage-point interest rate cut in its upcoming November meeting. Earlier forecasts included the possibility of a larger cut, but recent strong economic updates have reduced those expectations. The federal funds rate currently stands between 4.75% and 5%.

Asian, Markets, WallStreet