Asia stocks gain on hopes for China stimulus, Fed pause
A passerby walks past an electric monitor displaying various countries' stock price index outside a bank in Tokyo, Japan, on Mar 22, 2023. (File photo: REUTERS/Issei Kato)
HONG KONG: Most Asia-Pacific stocks markets strengthened on Wednesday (Jun 7), as expectations for stimulus from China and overnight gains on Wall Street boosted the mood.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 per cent in the morning.
China's benchmark equity index rose 0.3 per cent, while Hong Kong's Hang Seng added 1.2 per cent.
On Tuesday, China reportedly asked the biggest banks to cut deposit rates to boost the economy. Speculation of policy support for the troubled property sector has been lifting those shares over the past week.
Japan was an outlier, with the Nikkei sliding 1.1 per cent after touching a 33-year high on Tuesday.
"Overall, across the board, assets are doing pretty well," said Yuting Shao, macro strategist at State Street Global Markets."
"The US debt ceiling uncertainty (has been) removed (and) hope on China to introduce more help to the economy is also a good sign for the market."
The US S&P 500 ended higher on Tuesday, continuing to gain support from strengthening bets that the Federal Reserve will hold interest rates steady at its policy meeting next week.
The two-year Treasury yield, which typically moves in step with interest rate expectations, fell slightly to about 4.5 per cent in Tokyo, from Tuesday's close at 4.516 per cent. The yield on 10-year notes slipped to around 3.67 per cent.
The US dollar index slipped by 0.04 per cent to 104.03.
The Australian dollar reached its highest since mid-May at A$0.6690, extending a rally following a central bank rate increase on Tuesday.
Oil prices steadied on Wednesday after the previous session's losses, as demand concerns owing to slow global economic growth were offset by expectations of tighter global supply following Saudi Arabia's pledge to deepen output cuts.
US crude was flat at US$71.74 a barrel. Brent crude eased to US$76.25 per barrel.
Gold was slightly higher, trading at US$1,965.19 per ounce.
Leading cryptocurrency bitcoin was trading at about US$27,000, consolidating following a sharp overnight rebound from as low as US$25,350.
The token has been a paradoxical beneficiary of a US Securities and Exchange Commission (SEC) crackdown on cryptocurrency exchanges, and the classification of tokens including Solana, Cardano and Polygon as securities.
"The SEC is making life nearly impossible for several altcoins," said Oanda senior market analyst Ed Moya.
"And that is actually driving some crypto traders back into Bitcoin."
