Asian Shares Gain Following US Market Highs; Japan Stocks Reach New Peak – Sky Bulletin

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Following the lead of Wall Street’s new record highs, Asian stock markets experienced gains, with Japanese stocks hitting a new high watermark. The Nikkei 225 in Tokyo surged by 1.9% to secure a spot at 39,940.00 during the morning session. This leap surpasses the previous historical record of 38,915.87, reached amidst the financial peak of 1989, before a market crash triggered a long period of stagnant growth.

Japan’s labor market showed signs of improvement as the unemployment rate fell slightly to 2.4% in January from the previous 2.5%. However, the manufacturing sector’s purchasing managers index (PMI) for February suggested a shrinking demand with a reading of 47.2, signaling contraction in the sector.

The Hong Kong Hang Seng index rose by 0.3% to 16,562.50, and China’s Shanghai Composite index saw a 0.3% increase to 3,024.53. Despite China’s fifth consecutive month of shrinking manufacturing activity in February, as indicated by a PMI of 49.1 from the National Bureau of Statistics, the Caixin PMI offered a more optimistic view, hinting at expansion for the fourth continuous month.

Investors are keeping a watchful eye on China’s upcoming National People’s Congress, which is anticipated to introduce economic revitalization policies and set the annual GDP growth target.

While South Korea’s market was closed for a public holiday, down under in Australia, the S&P/ASX 200 appreciated by 0.6% reaching 7,745.60, and Thailand’s SET index dipped by 0.3%.

In the United States, the S&P 500 exceeded its previous record with a 0.5% increase to 5,096.27, the Nasdaq composite led gains with a 0.9% rise, and the Dow Jones Industrial Average just fell short of its recent peak despite a 0.1% increase. On the bond market front, yields subsided after an inflation report aligned with expectations, quelling fears of data indicative of inflationary spikes.

An indication was made that the Federal Reserve could begin lowering interest rates by June to help ease economic pressure and encourage investment, with more cuts possibly to follow throughout the year.

Other market movements saw a slight increase in U.S. benchmark crude oil prices and modest gains for Brent crude. The U.S. dollar also appreciated against the Japanese yen, while the euro showed small gains.

FAQs

  1. What caused Japanese stocks to reach a new record high?
    The Nikkei 225 in Tokyo climbed to a new record, influenced by the positive momentum from Wall Street’s recent highs.
  2. How is China’s manufacturing sector performing?
    Official PMI figures suggest contraction, but the Caixin PMI indicates some expansion, leading to mixed signals about the sector’s health.
  3. What is the global market anticipating from China?
    Investors are looking forward to potential policy announcements that aim to rejuvenate the economy at China’s National People’s Congress.
  4. Are there any expectations regarding interest rate changes in the US?
    Market indications suggest the Federal Reserve might start reducing interest rates as early as June, with additional cuts possible later in the year.

Conclusion

The Asian stock markets, particularly in Japan, have followed the upward trends set by Wall Street, achieving new records and showing signs of optimism. Despite mixed signals from manufacturing data in Japan and China, the overall sentiment appears positive, with anticipation building for pro-growth policies and potential interest rate cuts in the US. Investors remain cautiously optimistic as they navigate through economic indicators and policy developments.



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