Stock Market Update: Asian Shares Surge Following Wall Street's Record Rally

Asian markets showed strong gains on Thursday, buoyed by a record-breaking performance on Wall Street. Investors responded positively to the Federal Reserve's indication of potential interest rate cuts later this year.

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Japan Leads the Way:

Japan's benchmark Nikkei 225 soared by 2.0% to reach an all-time high of 40,815.66. This surge came after the government reported an almost 8% increase in exports for February compared to the previous year. Notably, shipments of cars and electrical machinery contributed to reducing the trade deficit by half from a year earlier.

Hong Kong and Shanghai's Performance:

Hong Kong's benchmark also saw a significant rise, jumping by 2% to 16,879.68. Meanwhile, the Shanghai Composite experienced a slight dip of less than 0.1% to 3,077.11, following the announcement of new measures by the Chinese government to bolster the economy.

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Other Markets' Performance:

Australia's S&P/ASX 200 added 1.1% to 7,782.00, while South Korea's Kospi gained 2.4% to 2,754.86.

Record-Breaking Day on Wall Street:

On Wednesday, the S&P 500 surged by 0.9% to hit an all-time high of 5,224.62 for the second consecutive day. Similarly, the Dow Jones Industrial Average jumped by 1% to 39,512.13, and the Nasdaq composite soared by 1.3% to 16,369.41, setting new records.

Fed's Influence:

The market's optimism was fueled by the Federal Reserve's announcement that it expects to deliver three interest rate cuts in 2024, maintaining its previous projections despite concerns about inflation. Fed Chair Jerome Powell reiterated that the central bank's next move is likely to be a rate cut, emphasizing the importance of confirming a gradual decline in inflation towards the target of 2%.

Bond Market Reaction:

In response to the Fed's announcement, Treasury yields initially saw mixed reactions. The two-year Treasury yield, closely linked to Fed expectations, initially rose before retreating. Meanwhile, the 10-year Treasury yield fluctuated but eventually settled lower.

Oil and Currency Markets:

Benchmark U.S. crude rose to $81.68 a barrel, while Brent crude added to $86.45 a barrel. The U.S. dollar slipped against the Japanese yen and the euro.

Overall, the market's upbeat mood reflects confidence in the economy's strength and the Fed's commitment to supporting growth while managing inflation.

Also Read: Speeding Up Stock Settlements: U.S. Leads Global Drive for Quicker Transactions