Asian Markets Track Wall Street Higher

Asian stock markets are trading mostly higher on Monday, following the broadly positive cues from Wall Street on Friday, amid rising optimism about an interest rate cut by the US Fed as early as September, and possibly another one or two by the end of the year, after the latest readings on the nation’s inflation. Asian markets closed mixed on Friday.

The inflation report showed personal income rose by less than expected, while personal spending increased in line with economist estimates. Another report also showed that consumer sentiment in the U.S. deteriorated less than previously estimated in July.

“The subdued rise in prices will give the Federal Reserve greater confidence that inflation is on track to moderate toward its 2% target,” said Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics.

Traders now await the Fed’s monetary policy announcement later in the week. While the Fed is widely expected to leave interest rates unchanged, the accompanying statement could impact the outlook for rates.

The Australian stock market is trading significantly higher on Monday, adding to gains in the previous session, following the broadly positive cues from Wall Street on Friday. The benchmark S&P/ASX 200 index is moving to a tad near the 8,000.00 mark, with gains across most sectors led by gold miners and technology stocks.

The benchmark S&P/ASX 200 Index is gaining 63.80 points or 0.81 percent to 7,985.10, after touching a high of 8,000.00 earlier. The broader All Ordinaries Index is up 65.50 points or 0.80 percent to 8,218.90. Australian stocks closed significantly higher on Friday.

Among the major miners, Rio Tinto and Mineral Resources are gaining more than 1 percent each, while BHP Group and Fortescue Metals are adding almost 1 percent each.

Oil stocks are higher. Beach energy is edging up 0.1 percent, while Origin Energy, Santos and Woodside Energy are gaining more than 1 percent each.

Among tech stocks, Afterpay owner Block is losing more than 1 percent, Appen is gaining almost 1 percent and Zip is surging more than 6 percent, while WiseTech Global and Xero are adding more than 1 percent each.

Gold miners are mostly higher. Newmont and Northern Star Resources are gaining almost 2 percent each, while Gold Road Resources and Evolution Mining are adding almost 1 percent each. Resolute Mining is surging almost 6 percent.

Among the big four banks, Commonwealth Bank, ANZ Banking and Westpac are gaining almost 1 percent each, while National Australia Bank is adding more than 1 percent.

In the currency market, the Aussie dollar is trading at $0.656 on Monday.

The Japanese stock market is trading sharply higher on Monday, recouping some of the losses in the previous three sessions. The benchmark S&P/ASX 200 is moving up 2 percent to above the 38,400 level, following the broadly positive cues from Wall Street on Friday, with gains across most sectors led by index heavyweights and technology stocks.

The benchmark Nikkei 225 Index closed the morning session at 38,415.75, up 748.34 or 1.99 percent, after touching a high of 38,719.70 earlier. Japanese shares ended notably lower on Friday.

Market heavyweight SoftBank Group is gaining more than 3 percent and Uniqlo operator Fast Retailing is adding 1.5 percent. Among automakers, Honda is gaining 2.5 percent, while Toyota is adding 1.5 percent.

In the tech space, Screen Holdings is losing almost 6 percent, while Advantest is gaining more than 4 percent and Tokyo Electron is adding almost 4 percent.

In the banking sector, Sumitomo Mitsui Financial is edging up 0.5 percent, while Mizuho Financial is adding almost 2 percent and Mitsubishi UFJ Financial is gaining almost 1 percent.

The major exporters are mostly higher. Canon is gaining more than 2 percent, Mitsubishi Electric is adding more than 4 percent and Sony is edging up 0.3 percent, while Panasonic is edging down 0.5 percent.

Among other major gainers, Shin-Etsu Chemical, Furukawa Electric and Sumco are soaring almost 7 percent each, while Mitsubishi Motors and IHI are surging more than 6 percent each. Fujikura is gaining almost 6 percent, while Mercari and Rakuten Group are adding more than 5 percent each. TDK and Resonac Holdings are advancing almost 5 percent each, while Dai-ichi Life, Mitsubishi Electric, Hino Motors, Murata Manufacturing and Sompo Holdings are up more than 4 percent each.

Conversely, Eisai is plummeting almost 12 percent and Hitachi Construction Machinery is plunging more than 9 percent.

In the currency market, the U.S. dollar is trading in the lower 153 yen-range on Monday.

Elsewhere in Asia, Hong Kong, South Korea, Malaysia, Singapore, Taiwan and Indonesia are higher by between 0.4 and 1.2 percent each. New Zealand and China are up 0.2 and 0.1 percent, respectively.

On Wall Street, stocks moved sharply higher during trading on Friday, following the mixed performance seen in the previous session. The major averages all showed strong moves to the upside, with the Nasdaq and the S&P 500 bouncing off their lowest closing levels in over a month.

The major averages ended the day off their best levels of the session but still firmly in positive territory. The Dow surged 654.27 points or 1.6 percent to 40,589.34, the Nasdaq shot up 176.16 points or 1.0 percent to 17,357.88 and the S&P 500 jumped 59.88 points or 1.1 percent to 5,459.10.

The major European markets all also moved to the upside on the day. While the German DAX Index climbed by 0.7 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both jumped by 1.2 percent.

Crude oil prices fell on Friday amid concerns about the outlook for demand due to the economic slowdown in China, while hopes for a ceasefire in Gaza also weighed. West Texas Intermediate Crude oil futures for September ended down $1.12 or 1.4 percent at $77.16 a barrel. WTI crude futures lost 1.9 percent in the week.

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