Asian Stocks Extend Rally on Fed Cut Hopes; Australia Hits Record High
Most Asian stock markets extended their gains on Thursday, lifted by growing expectations of U.S. Federal Reserve rate cuts, while Australian shares reached new record highs after weak jobs data boosted bets on more monetary easing from the Reserve Bank of Australia (RBA).
However, renewed U.S.-China trade tensions limited broader gains across the region, keeping some investors cautious.
U.S. stock index futures traded flat during early Asian hours, after Wall Street closed higher on Wednesday, supported by strong bank earnings that lifted sentiment in global markets.
Fed Rate Cut Bets Drive Asian Market Momentum
Markets are now pricing in a 25 basis-point rate cut at the Federal Reserve’s October 28–29 meeting, with another likely in December. Fed Chair Jerome Powell struck a dovish tone earlier this week, emphasizing labor market risks and signaling that the balance sheet runoff could end soon.
Fed Governor Stephen Miran reinforced the dovish outlook, warning that rising U.S.-China trade tensions pose downside risks to growth and calling for faster, more decisive rate cuts to support the U.S. economy.
Across Asia, the South Korean KOSPI led regional gains, rising nearly 2% as of 02:35 GMT, fueled by optimism over AI-driven chip demand. Samsung Electronics and SK Hynix both hit new record highs.
In Japan, the Nikkei 225 climbed 1.2%, while the broader TOPIX gained 0.6%.
India’s Nifty 50 rose 0.5%, while Singapore’s Straits Times Index slipped 0.5%, diverging from the regional trend.
China Stocks Fall on Renewed Trade Friction
Gains across Asia were capped as China’s markets fell amid renewed trade tensions with Washington. The U.S. criticized Beijing’s decision to tighten rare earth export controls and warned of possible retaliatory measures.
The tensions follow President Donald Trump’s recent threat to impose 100% tariffs on Chinese imports, reigniting fears of a trade war that unsettled markets in previous years.
The CSI 300 index slipped 0.1%, the Shanghai Composite fell 0.3%, and Hong Kong’s Hang Seng dropped 0.8%, extending recent declines.
Australia’s Market Hits Record High on Rate Cut Hopes
Australia’s S&P/ASX 200 surged as much as 1.3% to a record 9,109.7 points before easing slightly to 0.9% higher by midday.
Economic data showed unemployment rose to 4.5% in September, up from 4.3% in August, the highest since November 2021. Employment growth was weaker than expected, with jobs rising 14,900 versus forecasts for 20,500. The participation rate edged up to 67.0%.
The softer data strengthened expectations that the RBA could cut rates again before year-end, following its decision in September to keep the cash rate at 3.6%.
