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A man appears on an electronic bulletin board outside a securities company in Tokyo on April 18, 2023.Reuters/Issei Kato/File photo Obtaining license rights
HONG KONG, Nov 30 (Reuters) – Asian stock markets closed on Thursday despite a lethargic start for most regional stock markets following mixed messages from the Federal Reserve and similar struggles in U.S. stocks overnight. At the close of trading, it was poised to post its strongest performance in 10 months. .
The MSCI Asia Ex-Japan Stock Index (.MIAPJ0000PUS) has risen 6.7% so far this month, on track for its best month since January.
South Korea’s KOSPI (.KS11) rose 10.5% this month to lead the Asian rally, followed closely by Taiwan (.TWII) and Japan’s Nikkei Stock Average (.N225).
Stock markets around the world struggled on Wednesday as a fall in the dollar and U.S. Treasury yields eased financial conditions, after a solid month driven by market expectations for the Federal Reserve’s highest interest rates.
U.S. 10-year Treasury yields fell more than 60 basis points in November, the steepest monthly decline since late 2008.
U.S. central bank officials sent mixed messages on Wednesday, but investors remain influential Fed Director Christopher Waller, who has previously been a hawkish voice within the bank, spoke out on Tuesday. I was paying attention to the comments. Governor Waller has said that interest rate cuts could begin in the coming months if inflation continues to ease.
Meanwhile, U.S. data showed the economy was strong in the third quarter and inflation was on a downward trend, increasing expectations that the Fed may cut interest rates sooner than expected.
“We think liquidity and momentum can still support the market through December,” said Redmond Wong, market strategist for Greater China at Saxo Markets, adding that the U.S. economy is showing signs of slowing, so investors may want to move forward sooner rather than later. He said there was a possibility that interest rates would be cut in the first quarter.
Financial conditions in the U.S. are the easiest since early September, having eased by 100 basis points (bp) over the month, according to Goldman Sachs. The bank’s global and emerging markets index rose slightly last week, but financial conditions also eased by about 100 basis points compared to the previous month.
U.S. interest rate futures markets are currently pricing in more than 100 basis points of interest rate cuts starting next May, and two-year Treasury yields are at their lowest level since July, having fallen nearly 40 basis points this week alone.
“Absent rapid Fed easing, investors’ positions and sentiment have largely reversed, including softening consumer trends,” JPMorgan analysts wrote in a note on their 2024 global outlook. “We expect a more difficult macro environment for stock prices next year.”
“While stocks are currently valued with volatility near historic lows, geopolitical and political risks remain elevated. We expect it to decline.”
Elsewhere in China, closely watched factory surveys showed manufacturing activity contracted for the second consecutive month in November, with the pace also accelerating, providing a boost to economic growth. This suggests that further support from the government is needed.
Hong Kong’s Hang Seng Index (.HSI) and China’s benchmark CSI300 Index (.CSI300) both opened 0.1% lower. Chinese indicators fell more than 2% in November.
Oil prices rose more than $1 on Wednesday as investors overlooked a spike in U.S. crude oil, gasoline and distillate inventories and focused on upcoming meetings of the Organization of the Petroleum Exporting Countries (OPEC+) and allies such as Russia. did.
A source close to the group told Reuters that talks ahead of the meeting had focused on further cuts, but details had not yet been agreed.
U.S. crude oil fell 0.33% to $77.6 a barrel on Thursday, while Brent crude fell 0.34% to $82.82 a barrel.
Spot gold rose 0.03% to $2,045.29 per ounce.
Report by Kane Wu from Hong Kong. Editing: Vidya Ranganathan and Sam Holmes
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