Asian Shares Advance On Fed Rate Cut Hopes, China Stimulus

Asian stocks advanced on Monday due to rising expectations for Fed rate cuts in 2024 and China’s stimulus measures announced last week to support the country’s struggling property market.

The dollar held steady in Asian trading while gold prices jumped more than 1 percent to reach a record high due to adjustment in interest rate expectations.

Oil prices saw modest gains due to political uncertainty in two of the world’s major crude producers.

Iran’s President, Ebrahim Raisi, and Foreign Minister, Hossein Amir-Abdollahian, have been declared dead following a helicopter crash due to heavy fog near Jolfa, a city bordering Azerbaijan.

Separately, Saudi Arabia’s state news agency reported that 88-year-old King Salman will undergo treatment for lung inflammation.

China’s Shanghai Composite index rose 0.54 percent to 3,171.14 as the People’s Bank of China kept its benchmark loan prime rate (LPR) unchanged, as widely expected. Hong Kong’s Hang Seng index inched up 0.42 percent to 19,636.22.

There was optimism around Chinese economic recovery after China announced new measures last week to stabilize the property sector and boost home sales in the coming weeks.

The measures included a reduction of the down payment for housing loans, cutting mortgage interest rates for first and second home purchases, and removing the floor on mortgage rates.

Also, China’s finance ministry auctioned 30-year bonds at a yield of 2.57 per cent on Friday, largely in line with expectations.

Japanese markets rose notably as investors priced in a Fed rate cut as early as September.

The Nikkei average climbed 0.73 percent to 39,069.68, hitting the 39,000 mark for the first time in a month. The broader Topix index settled 0.82 percent higher at 2,768.04.

Chip material maker Shin-Etsu Chemical surged 4.3 percent while tech investor SoftBank Group gave up 2.8 percent.

Seoul stocks closed higher, with the Kospi average rising 0.64 percent to 2,742.14. Tech heavyweight Samsung Electronics jumped 1.9 percent and automaker Hyundai Motor surged 2.7 percent.

Australian markets closed higher, led by commodity-related stocks. The benchmark S&P ASX 200 rose 0.63 percent to 7,863.70 ahead of the release of the minutes of the RBA’s May meeting on Tuesday. The broader All Ordinaries index gained 0.62 percent to end at 8,132.10.

Star Entertainment shares soared 20 percent after the casino operator said it had received unsolicited and non-binding interest from several external parties regarding potential takeover transactions.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 index inched up 0.31 percent to 11,735.71.

U.S. stocks fluctuated before ending mostly higher on Friday, marking their fourth winning weak in a row on hopes of a September rate cut from the Federal Reserve.

The Dow edged up 0.3 percent to close above 40,000 for the first time and the S&P 500 added 0.1 percent while the tech-heavy Nasdaq Composite finished marginally lower.

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