Stocks in Asia experienced gains as traders reduced their bets on Federal Reserve rate hikes. The positive market sentiment was driven by expectations of further stimulus from China. Asian equities saw their longest winning streak since early September, with Hong Kong and mainland shares rallying. Tech stocks led the gains in Hong Kong. The optimism in the markets was fueled by the perception of a less hawkish stance from the Fed, indicated by recent comments from Fed Bank of San Francisco President Mary Daly. Furthermore, speculation about China implementing fresh stimulus also contributed to the positive market sentiment.
Investors will closely watch the minutes from the September Fed meeting for any indications that the central bank might reconsider its planned interest rate hikes. The minutes may provide clarity on whether the Fed will follow through with its projected rate hike. Additionally, Germany’s final inflation figures for September are set to be released. The market also kept an eye on geopolitical developments, particularly US President Joe Biden’s pledge to provide full support to Israel. In terms of commodities, oil sustained its earlier gains as the Israel-Hamas war remained contained.
In Asian markets, South Korea’s Kospi benchmark led the regional advance, posting its highest gains in nine months. Key upcoming events include NATO defense ministers meeting in Brussels, Russia Energy Week in Moscow, and the publication of the European Central Bank’s account of its September policy meeting. Overall, Asian stocks benefited from a combination of a more dovish stance from the Fed and expectations of stimulus measures from China, contributing to positive market sentiment.
