Asian shares displayed a mixed performance on Thursday following a rise in U.S. stocks, which approached record highs. In the aftermath of this, U.S. futures remained relatively stable, while oil prices saw an uptick. Japan’s Nikkei 225 index experienced a notable increase of 1.7%, reaching 50,705.76, fueled by expectations of an imminent rate cut by the U.S. Federal Reserve. This was contrasted by ongoing speculation regarding a potential interest rate hike from the Bank of Japan.
Shares of SoftBank Group Corp., a major technology and telecom player, surged 8.8%. Additionally, the government's 10-year bond yield rose above 1.9%, marking its highest point since 2007. In Hong Kong, the Hang Seng index managed to reverse earlier losses, adding 0.2% to close at 25,816.50, spurred by gains in technology and consumer sectors. Meanwhile, the Shanghai Composite index saw a marginal increase of less than 0.1%, finishing at 3,879.52. Conversely, South Korea’s Kospi index fell 0.7% to 4,008.22, impacted primarily by declines in technology and automotive stocks, while Australia's S&P/ASX 200 index slightly rebounded, adding fewer than 0.1% to reach 8,603.20. Taiwan's Taiex index, on the other hand, reported a decrease of nearly 0.3%.
On the previous day, U.S. stocks had risen, nearing record levels amid mixed economic data that sustained hopes for a potential interest rate cut. The S&P 500 gained 0.3%, climbing to 6,849.72, just 0.6% shy of its all-time high established in late October. The Dow Jones Industrial Average rose by 0.9%, closing at 47,882.90, while the Nasdaq composite saw a 0.2% increase, finishing at 23,454.09. A significant contributor to the S&P 500’s surge was Microchip Technology, whose shares skyrocketed by 12.2% after the company projected that sales and profits for the upcoming quarter would align with the upper ranges of its previous forecasts. CEO Steve Sanghi communicated that business conditions were better than anticipated, while also indicating a reduction in inventory levels.
Another notable performer was Marvell Technology, which saw its stock rise by 7.9% after delivering a stronger-than-expected profit for the latest quarter. The overall market sentiment improved as Treasury yields eased, following an employment report suggesting that U.S. employers outside of the government may have seen a reduction in job numbers for November. While this unexpectedly weak report from ADP could be discouraging for job seekers, it also strengthened the likelihood of the Federal Reserve opting for a rate cut at its forthcoming meeting. If enacted, it would mark the third rate cut of the year aimed at addressing the slowdown in the job market. Lower interest rates are generally favorable for investors, as they tend to elevate prices across various investment vehicles.
A separate report detailing the activity within the U.S. services sector offered a more positive outlook, indicating stronger-than-anticipated growth last month in sectors such as retail, finance, and insurance. Furthermore, the Institute for Supply Management’s survey reported that price increases were occurring at their slowest pace since April, an encouraging sign for advocates of lower interest rates who cite inflation concerns. The yield on the 10-year Treasury bond dropped to 4.06% from 4.09% recorded late Tuesday.
Additionally, lower interest rates have the potential to lift prices for a wide array of investments. In this context, Bitcoin saw a notable increase, rising above $93,000 following a turbulent period where it briefly dipped below $81,000 in the previous month. In the early trading hours on Thursday, U.S. benchmark crude oil prices increased by 27 cents to reach $59.22 per barrel, while Brent crude, the international standard, saw a rise of 22 cents to $62.89 per barrel. The U.S. dollar strengthened against the Japanese yen, climbing to 155.35 from 155.25 yen, while the euro experienced a decline, decreasing to $1.1659 from $1.1672.
