After central banks cut rates Gulf markets in black
Most stock markets in the Gulf ended higher on Thursday, after most central banks in the region cut their key interest rates following a larger-than-usual policy easing by the US Federal Reserve.
The Fed cut its benchmark rate by 50 basis points (bps) on Wednesday, with policymakers seeing another half a percentage point fall by the end of this year.
Saudi Arabia’s benchmark index rose 1.3 percent, boosted by a 2 percent jump in Al Rajhi Bank.
The kingdom, the region’s biggest economy, cut its repurchase agreement (Repo) rate and reverse repo rate by 50 bps each to 5.5 percent and 5 percent, respectively, according to a central bank statement.
Elsewhere, oil behemoth Saudi Aramco was up 1.1 percent.
Oil prices – a catalyst for the Gulf’s financial markets – rose after the Fed’s rate cut, but Brent was still hovering around its lowest levels of the year, below $75, on expectations of weaker global demand.
China shares set for rare weekly rise after fed rate cut
China stocks fell on Friday after benchmark lending rates were unexpectedly kept unchanged, but the main indexes were headed for their first weekly gain in a month as the US rate cut strengthened bets that Beijing will soon unveil fresh stimulus.
Hong Kong shares jumped more than 1 percent, on track for a sixth day of gains, and the best weekly performance in five months, amid a broad rally in global markets.
China’s blue-chip CSI300 index was down 0.27 percent at the midday break, while the Shanghai Composite index fell 0.23 percent. But both indexes were set for rare weekly rises.
Asian markets track wall street record to enlarge worldwide rally
Asian markets built Friday on the latest global rally after a jumbo US interest rate cut this week, while the yen edged up after the Bank of Japan decided against another hike.
Traders have been put in a bullish mood by the Federal Reserve’s decision to go big on its first reduction since the start of the Covid pandemic – opting for 50 basis points instead of 25 – and pledging more would come.
There had been fears the move could signal officials were worried about the economy and were behind the curve in easing policy, but data Thursday showing jobless claims at their lowest since May suggested it was heading for a soft landing, rather than recession.
After a muted initial reaction to the Fed cut, Wall Street bounded higher Thursday, with the S&P 500 and Dow hitting new records and the Nasdaq piling on more than 2 percent.
Australia stocks hit record high
Australian shares touched an all-time high on Friday, as optimism around the US Federal Reserve’s oversized interest rate cut overshadowed concerns about a domestic jobs report pointing to a longer wait for the local central bank’s easing.
The S&P/ASX 200 index was up 0.6 percent at a record peak of 8,243.3, as of 00:40 GMT, and on track to a seventh straight session of gains.
Earlier this week, the Fed announced a bigger-than-usual half-percentage-point cut, and indicated more rate cuts were on the horizon, sending Wall Street to record highs on Thursday.
Overnight, the US Dow Jones Industrial Average rose 522.09 points, or 1.26 percent, at 42,025.19 points. The S&P 500 gained 95.38 points, or 1.70 percent while Nasdaq gained 440.68 points, or 2.51 percent.
Japan’s Nikkei rallies on Wall Street’s lead
Japan’s Nikkei share average rose strongly in early trading on Friday, tracking overnight gains on Wall Street, while traders also kept a wary eye on a Bank of Japan policy announcement later in the day.
The tech-heavy Nikkei was up 1.8 percent at 37,822.84, as of 00:04 GMT, with chip-sector stocks outperforming in line with US equity moves on Thursday. Chip-making equipment giant Tokyo Electron soared 4.6 percent.
Automakers also gained amid a weakening yen, which boosts the value of overseas revenue.
Toyota Motor advanced 1.7 percent. Of the Nikkei’s 225 components, 211 rose, 12 fell and two were trading flat.
The broader Topix gained 1.42 percent.
The time of the BOJ announcement isn’t set, but typically comes around 03:00-04:30 GMT.
Indian stocks set to open higher
Indian shares are set to open higher on Friday, as an outsized interest rate reduction by the US Federal Reserve and the anticipation of a soft landing for the world’s largest economy boosted risk appetite across global markets.
The GIFT Nifty was at 25,523 points, as of 07:55 a.m. IST, indicating the NSE Nifty 50 will open slightly above its close of 25,415.8 on Thursday.
Other Asian markets opened higher, with the MSCI Asia ex-Japan index.
China markets were the only exception, with the blue-chip CSI 300 losing about 0.3 percent, after the central bank held its benchmark lending rates steady, hurting expectations of further policy support to revive its economy.
Wall Street equities closed higher overnight, with the S&P 500 hitting a record high.
Sri Lanka stocks close higher
Sri Lankan shares closed higher on Thursday, aided by gains in utilities and financial stocks.
The CSE All Share index settled up 0.54 percent at 10,884.57.
The island nation reached a draft deal with creditors to restructure $12.5 billion of international bonds, it said on Thursday.
Office Equipment PLC and PMF Finance PLC were the top gainers on the CSE All Share, rising 14.5 percent and 14 percent, respectively.
Trading volume on the CSE All Share index rose to 57.5 million shares from 39.1 million shares in the previous session.
The equity market’s turnover rose to 1.23 billion Sri Lankan rupees ($4 million) from 931.5 million rupees in the previous session, according to exchange data.