Asian stocks commenced the week with gains as investors eagerly awaited interest rate decisions from Britain, the United States, and Japan. This upward momentum followed a broad rally on Wall Street that concluded a volatile week.
In Tokyo, the Nikkei 225 index surged by 2.5% to 38,587.87. The primary focus in Asian markets this week is on the Bank of Japan’s monetary policy meeting on Wednesday, with widespread expectations that the central bank will raise its key interest rate from near-zero to potentially 0.3%.
The US Federal Reserve will also conclude its policy meeting on Wednesday, with expectations of maintaining the benchmark rate unchanged. However, there might be hints at a possible rate cut in September.
The Japanese yen weakened against the US dollar in anticipation of these changes, with the US dollar trading at 153.42 yen early Monday, down from 153.76 yen last week.
Hong Kong’s Hang Seng index added 1.8% to 17,331.24, while the Shanghai Composite index remained nearly unchanged at 2,892.10. This stability came after official data released on Saturday showed a 3.5% rise in industrial profits for the first half of 2024 compared to the previous year, offering a glimmer of positive news following recent interest rate cuts and stimulus measures enacted after a top-level policy meeting of the ruling Communist Party earlier this month.
Australia’s S&P/ASX 200 advanced by 0.8% to 7,988.20, and South Korea’s Kospi jumped by 1.2% to 2,765.05. Elsewhere, Taiwan’s Taiex gained 0.7%, while the SET in Bangkok was closed for a holiday.
On Friday, the S&P 500 experienced its best day in seven weeks, jumping 1.1% to 5,459.10, fueled by better-than-expected profits from companies like 3M. The Dow Jones Industrial Average soared by 1.6% to 40,589.34, and the Nasdaq composite climbed by 1% to 17,357.88.
In Europe, gas prices rose despite weak demand, with benchmark futures climbing 2.2% to €32.48 per megawatt-hour on Friday, following an outage at an Australian liquefied natural gas export plant. This increase occurred despite Italy’s Eni SpA reporting a 16% year-on-year fall in consumption during the second quarter.
In political news, US Vice President Kamala Harris has seen a boost in her favorability ratings since President Joe Biden announced he would not seek re-election and endorsed her. According to an ABC News/Ipsos poll conducted between July 26 and 27, Harris’ favorability rating rose from 35% to 43% within a week. During the same period, her campaign raised $200 million. Conversely, Republican candidate Donald Trump’s favorability rating declined from 40% to 36%.
