Asian Markets Rise Following Record Close on Wall Street

Asian shares have opened mostly higher after U.S. stocks achieved record highs, closing out another winning week. Futures for the U.S. markets and oil prices have also seen upward movement.

In Hong Kong, the Hang Seng Index fell by 0.6%, stopping at 20,869.39, while the Shanghai Composite Index bounced up by 0.8% to reach 3,288.32. Notably, the A-share index in Shenzhen surged by 2.2%.

The positive performance in China's markets can be attributed to recent cuts in the one-year and five-year Loan Prime Rates, which serve as benchmark rates for loans. These lower rates aim to ease the financial burden on borrowers, particularly property developers who have faced challenges following a crackdown on excessive borrowing over recent years.

Experts suggest that the main issue remains weak demand, indicating that significant improvements will rely on increased government spending. China’s Finance Ministry has promised higher outlays in the upcoming months. However, analysts like Zichun Huang from Capital Economics express caution, noting that fiscal easing might only result in a slight and temporary boost in activity.

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

Oil prices have slowly increased after a decline the previous week, as fears have lessened regarding a potential Israeli strike on Iranian oil facilities. A strike could significantly disrupt crude exports from Iran, a major oil producer, particularly affecting its shipments to China and other nations. Concerns about China's demand strength have previously weighed on oil prices.

As of early Monday, U.S. benchmark crude was trading up by 38 cents at $69.07 per barrel, and Brent crude, the international standard, gained 31 cents to reach $73.37 per barrel.

In foreign exchange markets, the U.S. dollar dipped to 149.23 Japanese yen from 149.57 yen late on Friday, reflecting a recent weakening due to expectations that the Bank of Japan may slow down the pace of interest rate hikes.

Meanwhile, the euro traded slightly lower at $1.0865, down from $1.0867.

Last Friday, the U.S. stock market achieved new highs once again. The S&P 500 climbed 0.4% to surpass the previous record, closing at 5,864.67. The Dow Jones Industrial Average inched up 0.1% to also set a new record at 43,275.91, while the Nasdaq composite advanced 0.6% to finish at 18,489.55.

Overall trading on Wall Street remained calm, with the S&P 500 marking its sixth consecutive week of gains, the longest winning streak observed this year.

Positive economic indicators have raised optimism about the U.S. economy’s ability to navigate the ongoing inflation crisis without resulting in a severe recession, which many had considered a certainty. With the Federal Reserve now cutting interest rates to sustain economic momentum, investors anticipate further gains in stock prices.

Much of the market movement is attributed to the strong performance of Netflix, which saw its stock jump by 11.1% following optimistic profit reports surpassing analyst expectations despite plateauing subscriber growth.

However, this surge was partially offset by a 5.2% drop in shares of CVS Health after the company projected earnings for the quarter well below analyst forecasts.

Market participants are beginning to converge on the anticipation that the Federal Reserve will reduce its main interest rate by a quarter percentage point during its next meeting in November. Earlier expectations had leaned towards a larger cut of half a percentage point, but strong economic updates have shifted this outlook. Currently, the federal funds rate is set in the range of 4.75% to 5%.stocks, market, Asia