Market watch: Asian shares rebound as rate-cut optimism lifts tech stocks; crude holds steady amid supply risks
Asian stocks climbed on Tuesday, buoyed by growing expectations that the US Federal Reserve will cut interest rates in December, while crude prices steadied as traders balanced geopolitical uncertainty with forecasts of a softer oil market next year.
As per Reuters, MSCI ’s index of Asia-Pacific shares excluding Japan rose 1%, led by a rebound in technology names after last week’s sharp 4% drop.
The index is still on track for a 3.8% fall for the month – its first monthly decline since March. Japan’s Nikkei also gained 0.8% on reopening after a holiday, recovering from last week’s 3.5% slump.
South Korea’s Kospi surged 2.39%, while the small-cap Kosdaq gained 1.7%, supported by strong moves in heavyweight chipmakers SK Hynix and Samsung Electronics, which were up as much as 5% and 4%, CNBC reported.
Australia’s ASX 200 trimmed earlier gains but stayed slightly above the flatline. In Hong Kong, the Hang Seng Index rose 1% and the Hang Seng Tech Index jumped 1.74%, while the mainland’s CSI 300 added 0.53%.
As quoted by Reuters, investment director Charlie Aitken of Regal Partners said the return of broad gains was “classic bull equity market behaviour”, noting how markets often bounce after “a short, sharp pullback”.
Rate-cut hopes strengthened after Fed Governor Christopher Waller said data showed the US job market remained weak enough to justify another quarter-point cut.
Markets now expect an 85% chance of a December cut, significantly higher than the 42% seen a week earlier, according to Reuters.
San Francisco Fed president Mary Daly similarly supported lowering rates, telling the Wall Street Journal she saw signs of deteriorating labour conditions.
Wall Street rallied overnight, with the Nasdaq jumping 2.69% in its strongest daily performance since May 2024, reported Reuters.
Treasury yields were steady in Asian hours, while the dollar softened slightly. The yen, however, stayed fragile near last week’s 10-month low, with political tensions between Tokyo and Beijing over Taiwan still simmering.
Bloomberg reported a further uplift in sentiment across Asian markets, with Japanese and South Korean stocks tracking Wall Street. Traders drew confidence after Presidents Donald Trump and Xi Jinping held talks viewed as a positive step in repairing relations following their tariff truce.
Fed officials’ consistent signals of support for a December cut reinforced belief that the recent market wobble was a temporary pullback rather than the start of a deeper slide.
In commodities, Brent crude slipped 0.3% to $63.20 a barrel and US crude eased 0.2% to $58.71, according to Reuters.
Prices had gained 1.3% in the previous session amid doubts over a Russia-Ukraine peace deal that could eventually free up sanctioned Russian shipments.
Meanwhile, Deutsche Bank warned of a potential two-million-barrel-per-day surplus in 2026, expecting a “bearish” outlook to persist even into 2027, reported Reuters.
Still, crude found some support from rising expectations of a US rate cut, which could help strengthen economic activity and oil demand.
As per Reuters, MSCI ’s index of Asia-Pacific shares excluding Japan rose 1%, led by a rebound in technology names after last week’s sharp 4% drop.
The index is still on track for a 3.8% fall for the month – its first monthly decline since March. Japan’s Nikkei also gained 0.8% on reopening after a holiday, recovering from last week’s 3.5% slump.
South Korea’s Kospi surged 2.39%, while the small-cap Kosdaq gained 1.7%, supported by strong moves in heavyweight chipmakers SK Hynix and Samsung Electronics, which were up as much as 5% and 4%, CNBC reported.
Australia’s ASX 200 trimmed earlier gains but stayed slightly above the flatline. In Hong Kong, the Hang Seng Index rose 1% and the Hang Seng Tech Index jumped 1.74%, while the mainland’s CSI 300 added 0.53%.
As quoted by Reuters, investment director Charlie Aitken of Regal Partners said the return of broad gains was “classic bull equity market behaviour”, noting how markets often bounce after “a short, sharp pullback”.
Rate-cut hopes strengthened after Fed Governor Christopher Waller said data showed the US job market remained weak enough to justify another quarter-point cut.
Markets now expect an 85% chance of a December cut, significantly higher than the 42% seen a week earlier, according to Reuters.
San Francisco Fed president Mary Daly similarly supported lowering rates, telling the Wall Street Journal she saw signs of deteriorating labour conditions.
Wall Street rallied overnight, with the Nasdaq jumping 2.69% in its strongest daily performance since May 2024, reported Reuters.
Treasury yields were steady in Asian hours, while the dollar softened slightly. The yen, however, stayed fragile near last week’s 10-month low, with political tensions between Tokyo and Beijing over Taiwan still simmering.
Bloomberg reported a further uplift in sentiment across Asian markets, with Japanese and South Korean stocks tracking Wall Street. Traders drew confidence after Presidents Donald Trump and Xi Jinping held talks viewed as a positive step in repairing relations following their tariff truce.
Fed officials’ consistent signals of support for a December cut reinforced belief that the recent market wobble was a temporary pullback rather than the start of a deeper slide.
In commodities, Brent crude slipped 0.3% to $63.20 a barrel and US crude eased 0.2% to $58.71, according to Reuters.
Prices had gained 1.3% in the previous session amid doubts over a Russia-Ukraine peace deal that could eventually free up sanctioned Russian shipments.
Meanwhile, Deutsche Bank warned of a potential two-million-barrel-per-day surplus in 2026, expecting a “bearish” outlook to persist even into 2027, reported Reuters.
Still, crude found some support from rising expectations of a US rate cut, which could help strengthen economic activity and oil demand.
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