Asian shares saw a positive uptick on Thursday, following a tech-driven rally on Wall Street. The dollar also maintained its gains after U.S. core inflation numbers came in slightly higher than expected, leading to doubts about a significant rate cut by the Federal Reserve next week.
Global Economic Indicators
Investors are now eagerly awaiting a policy decision from the European Central Bank, where a rate cut is highly anticipated. The question remains whether the ECB would make further moves in October and December to stimulate the economy. Despite uncertainties, Europe is poised for solid gains ahead of the ECB risk event.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 1.5%, with the Nikkei leading the way with a 3.3% jump. The weaker yen also provided a boost, pulling back from its recent high against the dollar. Tech-heavy share markets in regions like Taiwan and South Korea also saw gains, while China remained subdued.
Market Response
The disappointment over core inflation figures initially pressured Wall Street, but tech stocks once again played a crucial role in driving the markets higher. AI darling Nvidia’s shares rose 8%, fueled by reports of potential chip exports to Saudi Arabia. This positive sentiment extended to regional markets, contributing to the overall market rally.
In the foreign exchange market, the dollar traded near a four-week high against the euro, while short-dated U.S. Treasuries experienced a sell-off overnight. Oil prices extended gains due to concerns over potential production disruptions caused by Hurricane Francine. Brent crude futures rose to $71.09 a barrel, while gold prices remained steady at $2,517.89 an ounce.
Overall, Asian shares responded positively to the tech-driven rally on Wall Street, with investors keeping a close eye on global economic indicators and upcoming policy decisions. The market remains dynamic and sensitive to both domestic and international developments, highlighting the need for a cautious and informed approach to investment decisions.