Fed Rate Cut Drives Asian Stocks Near Record High- Asia Market Wrap

Asian equities rose, with MSCI’s regional gauge approaching a record high, after US inflation and jobless claims data reinforced predictions that the Fed will drop interest rates next week.

Benchmark share indexes in Japan, South Korea, Australia, and Hong Kong climbed, outweighing mainland China shares’ mixed performance. Chipmakers such as SK Hynix, Samsung, and TSMC were major contributors to Friday’s increases. Alibaba stock soared.

The MSCI regional equities gauge has now risen more than 20% this year and is only 0.3% from its all-time high established in 2021. The optimistic gains on Friday came after the S&P 500, the tech-heavy Nasdaq 100, and the MSCI global share index all set new records on Thursday.

US inflation statistics issued Thursday indicated that consumer price index data excluding food and energy rose 0.3% in August, as expected by economists. Weekly jobless claims rose to their highest level in nearly four years, fuelling expectations that Fed members will decrease interest rates at their September 16-17th meeting.

Oil sank for a second day after the IEA forecast an even larger surplus next year, with the negative outlook countering concerns about global geopolitical tensions. Gold is poised for a fourth weekly increase.