- A robust risk appetite combined with basic resources-linked companies propelled European shares to all-time highs.
- The pan-European STOXX 600 index saw a 0.7% increase and a record high of 510.07 points.
- The Nikkei 225 in Japan reached a new closing high as the country’s exports increased for the third straight month.
After the Federal Reserve said that it is still on schedule to cut interest rates three times this year, Asian shares saw a spike in optimism. A robust risk appetite combined with basic resources-linked companies propelled European shares to all-time highs.
Within the first few minutes of trading, the pan-European STOXX 600 index saw a 0.7% increase and a record high of 510.07 points. On Thursday, U.S. stock index futures increased as investors found solace in the Federal Reserve’s decision to remain with its three-rate-cut plan for this year, while chipmakers followed gains in Micron Technology.
Sensex and Nifty
Following the announcement by U.S. central bankers that borrowing costs would remain steady and that they still plan to lower interest rates by 75 basis points by the end of 2024, Wall Street saw a surge on Wednesday, with the S&P 500 reaching a record high.
Gains in IT companies listed in Taiwan, South Korea, and Hong Kong drove the movements in Asia, as Micron Technology Inc. released a robust revenue projection that reflected demand driven by artificial intelligence. The Nikkei 225 in Japan reached a new closing high as the country’s exports increased for the third straight month.
Fed policymakers signaled they are not concerned by a recent recovery in pricing pressures by maintaining their expectation for three cuts in 2024 and moving toward decreasing the pace of bond holding reductions.
Following their gain on Wednesday, Treasurys remained stable in Asian trading as expectations increased that the Fed may lower interest rates as early as June. With the yen rising for the first time in eight days, the dollar continued its downward trend.
When the Bank of England delivers its monetary policy decision, traders in Europe will turn their attention to it. The Bank of England is expected to maintain interest rates at a 16-year high, which will allow inflationary pressures to subside before the fastest tightening cycle in decades begins. After the Fed’s remarks, gold surged to trade above $2,200 per ounce for the first time, and oil prices also increased.
