Global Stock Markets Surge on Expectations of Interest Rate Cuts

Asian Stock Markets Live

 

Asian stock market indexes are trading higher on Friday tracking gains from the US markets overnight, as US Federal Reserves hinted interest rate cuts are coming soon, if inflation signals are supportive. Indian stock markets are not trading today, due to a holiday on account of Mahashivratri.

Japan’s Nikkei 225 index closed marginally higher by 0.23%, as the country’s household spending fell more than expected in January, suggesting inflation is outpaced wage gains. Investors remain cautious as the Bank of Japan closely monitors the inflation and other economic data for its next policy.

Australia’s S&P ASX 200 index closed above 1%, rising for the third straight session at a record high, while the Kospi index climbed 1.22%, on Friday. Shanghai and Hang Seng are trading higher by 0.64% and 1.49% respectively. Elsewhere, Taiwan ended in the green, while Straits Times, SET Composite, and Jakarta are in positive territory.

 

US Markets Updates

 

The US stock market indexes closed higher on Thursday, on optimism of interest rate cuts tentatively in June. The S&P 500 index hit a fresh record high after the US Fed Chair Jerome Powell, in his last day of testimony before Congress stated that interest rate cuts were nearing a reality. 

The optimism of Powell’s remark pushed the Treasury yields lower, the 10-year Treasury yields slipped 4.087% on Thursday from its previous close of 4.101%. The chances of rate cuts in June have increased to 76% from 73% recorded two days back in the CME Fedwatch tool.

On Thursday, the Dow Jones Industrial Average (DJIA) closed higher by 130.30 points or 0.34% and ended at 38791.35, while the S&P 500 index gained 52.60 points or 1.03% and settled at 5157.36. The tech-heavy Nasdaq composite index was up by 241.83 points or 1.51% and finished at 16273.31. The Dow Jones and Nasdaq futures are trading slightly lower by 0.03% and 0.12% respectively on Friday at 11.45 am IST.

 

European Stock Markets Updates

 

The global market sentiments became positive on optimism of interest cut rates, after the European Central Bank (ECB) meeting on Thursday. The central bank has kept the interest rate steady as widely expected, and lowered its inflation outlook. 

ECB in its meeting, has reduced its forecast for inflation to 2.3% from 2.7% but also cut its projections for economic growth. This raised the hope of an interest rate cut in June. The pan-European Stoxx 600 index closed higher by 1.05% on Thursday. The key indices CAC and DAX gained 0.77% and 0.71% respectively, while the UK’s FTSE was up by 0.17% on Thursday.

Optimism that major central banks are set to cut rates as soon as June is gathering pace after the European Central Bank kept rates steady but cut its forecast on inflation, suggesting a faster pace of progress than previously. 

 

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