Asian Stocks Rally on Fed Rate Cut Bets and US-China Trade Progress
Asian stock markets surged on Monday in a broad-based rally, fueled by growing expectations that the U.S. Federal Reserve will cut interest rates later this week and by signs of easing trade tensions between Washington and Beijing.
Regional sentiment was also supported by a record-high close on Wall Street last week, while U.S. stock futures extended gains during early Asian trading hours as of 02:53 GMT.
Fed Rate Cut Expected as Trade Truce Advances
Markets are widely expecting the Federal Reserve to lower interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday, following softer U.S. inflation data for September.
Investors have already priced in the rate cut and are now looking for guidance from Fed Chair Jerome Powell on how soon and how far the central bank could continue easing policy.
Meanwhile, optimism over trade talks increased after U.S. and Chinese negotiators reached a preliminary trade framework in Kuala Lumpur over the weekend. The agreement sets the stage for a final decision between President Donald Trump and President Xi Jinping at a summit in South Korea later this week.
U.S. Treasury Secretary Scott Bessent said both nations agreed to pause new tariff threats and delay China’s planned restrictions on rare-earth exports.
“I think we’re going to have a deal with China,” Trump told reporters on Sunday, signaling optimism for a breakthrough.
Regional Markets Hit New Highs
China’s Shanghai Shenzhen CSI 300 gained 0.7%, while the Shanghai Composite rose 0.8%. Hong Kong’s Hang Seng Index advanced 1%, with the Hang Seng TECH Index up 1.2%.
In Japan, the Nikkei 225 jumped over 2%, surpassing the 50,000-point mark for the first time ever, hitting an intraday high of 50,491.23 points. The TOPIX Index also surged 1.7% to reach a new all-time high of 3,328.3 points.
Investor confidence was lifted by expectations that Prime Minister Senae Takaichi, known for her fiscally dovish stance, will roll out new stimulus measures to sustain Japan’s economic recovery. Reports last week indicated that her administration is preparing a fiscal relief package focused on curbing inflationary pressures.
In South Korea, the KOSPI Index hit a record 4,038.39 points, climbing 2.3%, driven by strong performances from Samsung Electronics (KS:005930) and SK Hynix Inc (KS:000660).
Elsewhere in the region, Australia’s S&P/ASX 200 and Singapore’s Straits Times Index each rose 0.4%, while India’s Nifty 50 futures ticked higher ahead of market opening.
