Asian Market News: Stocks soar, with Nikkei above 42,000 after Wall Street sets new records

Asian Market News: Asian stocks rose on Thursday, tracking a sharp rise on Wall Street, with Japan’s Nikkei 225 index surging above 42,000 points for the first time.

The U.S. stock market hit new all-time highs on Wednesday, driven by big tech companies whose shares soared on the back of enthusiasm for artificial intelligence. Hopes of lower interest rates also pushed markets higher.

The Nikkei 225 index jumped 0.8 percent to 42,179.84 points, again surpassing its all-time high after closing at record highs on Tuesday and Wednesday. The Hang Seng in Hong Kong climbed 1.1 percent to 17,667.58 points. The Shanghai Composite Index gained 0.7 percent to 2,959.25 points, while the Kospi in Seoul gained 0.8 percent to 2,891.34 points. Australia’s S&P/ASX 200 index gained 1 percent to 7,894.30 points.

Taiex gained 1.1%, while Taiwan Semiconductor Manufacturing Corp. jumped 2.4%. U.S.-listed shares of TSMC rose 3.5% after the company said its revenue rose nearly 33% in June from a year earlier. The company makes chips for Nvidia and other companies that have driven the business world’s rush to artificial intelligence technology.

The promise of big future profits from AI has propelled Nvidia in particular to eye-popping highs over the past year, and Nvidia rose another 2.7% on Wednesday to bring its year-to-date gain to 172.5%. It was again the most powerful single force pushing the S&P 500 higher as the Wall Street rally extended into a seventh day, with big tech companies leading the way. The S&P 500 jumped 1% and broke above the 5,600 level for the first time, closing at 5,633.91. The Nasdaq composite rose 1.2% to 18,647.45, and the Dow Jones Industrial Average gained 1.1%. Advanced Micro Devices was another major force behind the stock market’s jump, and it jumped 3.9% after announcing a $665 million deal to buy Silo AI, a European AI lab.

Markets have hit record highs despite a slowing U.S. economy and tightening pressure on low-income households. Hopes that inflation will fall enough for the Federal Reserve to make long-awaited interest rate cuts later this year are also boosting buyer enthusiasm.

Fed Chairman Jerome Powell returned to Capitol Hill to testify on interest rates, repeating many of his comments from the day before. He said he was sending “no signal” about when rate cuts might come, but he stressed the downsides of implementing them too late.

“More reliable data would strengthen our confidence” and pave the way for a reduction, Powell said.

Wall Street expects the Fed to begin cutting its key interest rate in September, but traders have a history of rushing to do so. Powell acknowledged a recent improvement in inflation but reiterated that the Fed is not convinced that inflation is heading sustainably toward its 2% target. Later Thursday, the U.S. government will release its latest monthly inflation update. Economists expect it to show that U.S. consumers paid 3.1% higher prices for food, airfare and everything else in June than a year earlier. That would be slightly slower than May’s 3.3% inflation rate.

“While the Federal Reserve… wants to see ‘more good data,’ US inflation will play an important role in validating whether markets are pricing in a rate cut as early as September this year,” Yeap Jun Rong of IG said in a commentary.

This week will also mark the unofficial start of the new earnings season. Delta Air Lines, JPMorgan Chase and others will report their spring earnings from April through June, and Wall Street is hoping that the S&P 500 companies will post their strongest growth in more than two years.

On the New York Mercantile Exchange, the barrel of American crude oil, an international benchmark, gained 75 cents to $82.85. The barrel of Brent, an international benchmark, gained 79 cents to $85.87.

The US dollar fell from 161.66 to 161.60 Japanese yen. The euro rose from 1.0832 to 1.0839 dollars.

Add a Comment

Your email address will not be published. Required fields are marked *