TOKYO — Asian shares rose mainly on Thursday after a strong finish on Wall Street, as expectations for US interest rate cuts this year remained solid.
The Japanese benchmark Nikkei 225 rose 0.8% to 39,773.14. Sydney’s S&The P/ASX 200 rose 0.5% to 7,817.30. South Korea’s Kospi rose 1.3% to 2,742.00 points.
Analysts say Taiwan Semiconductor Manufacturing Co’s (TSMC) facilities could receive aid sooner than expected – easing concerns about production shutdowns – after a powerful earthquake struck on Wednesday, killing at least nine people. In Taiwan, trading was closed on Thursday and Friday due to national holidays.
“Market participants took comfort from the weaker-than-expected U.S. Purchasing Managers’ Index for services, which offset the surprise recovery in manufacturing activity earlier this week and suggests that overall demand may still remain subdued ahead of the Federal Reserve’s inflation fight,” Yeap said. Jun Rong, market analyst at IG.
On Wall Street, the S&The P500 rose 5.68 points, or 0.1%, to 5,211.49. The Dow Jones Industrial Average fell 43.10, or 0.1%, to 39,127.14, and the Nasdaq composite rose 37.01, or 0.2%, to 16,277.46.
GE Aerospace helped lead the S&P500 with a jump of 6.7%. It was the second day of trading for the company after it spun off its electricity and energy businesses to mark the end of the General Electric conglomerate. Cal-Maine Foods rose 3.6% after posting a stronger-than-expected profit for the latest quarter on sales of a record number of eggs.
They helped offset an 8.2% decline for Intel, which for the first time disclosed financial details about key parts of its business, including its money-losing foundry business. Walt Disney Co. fell 3.1% after shareholders voted against installing an activist investor on the board, who had promised to shake up the company to boost its stock price. The pair’s declines were a major reason the Dow Jones lagged other indexes.
Stocks have largely slowed their roll since soaring 26% higher from November through March. Concerns are mounting that a remarkably resilient U.S. economy could prevent the Federal Reserve from making as many rate cuts this year as previously hoped. Critics also say a pullback is overdue as stock prices have become expensive by several measures.
The Fed has indicated it may cut its key interest rate three more times this year, which would ease pressure on the economy. But Fed officials say they will only do so if more evidence emerges showing inflation is trending toward their 2% target.
A more comprehensive March labor market report will be released on Friday from the US government, and this will likely be the most important economic data of the week.
Traders have already dramatically cut their expectations for how many times the Federal Reserve will cut rates this year, cutting rates in half from a forecast of six at the start of the year. That puts them in line with Fed officials in general. However, some investors are preparing for two or even zero cuts this year as the Fed may not want to start cutting rates too close to the November elections for fear of appearing political.
In the bond market, yields on government bonds fell. The ten-year yield fell from 4.36% at the end of Tuesday to 4.34%. The two-year yield, which is more closely aligned with expectations for Fed action, fell from 4.70% to 4.67%.
In energy trading, U.S. crude rose 4 cents to $85.47 a barrel. Brent crude, the international standard, rose 7 cents to $89.42 a barrel.
In currency trading, the US dollar rose from 151.65 yen to 151.70 Japanese yen. The euro was at $1.0842, little changed from $1.0837.
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AP Business Writer Stan Choe contributed to this report.
