Markets rise on growing rate cut hopes
Source: AFP
Markets rose Wednesday on growing hopes of US interest rate cuts after soft inflation data, with Japan's Nikkei hitting a second record high in as many days.
The S&P 500 and Nasdaq finished at fresh highs Tuesday after US data showed a tamer-than-feared impact on prices from President Donald Trump's tariff blitz.
That boosted hopes among that the US Federal Reserve and its embattled chief Jerome Powell will cut interest rates next month.
"Jerome 'Too Late' Powell must NOW lower the rate," Trump said on Truth Social, while also threatening a "major lawsuit" over renovations to Fed buildings.
The US consumer price index reading for July showed annualised inflation at 2.7 percent, unchanged from a month earlier.
Investors calculated that the benign data was not enough to sway the Fed away from an expected interest rate cut next month.
"Stocks... took the (inflation) number as confirmation that September is shaping up to be the long-anticipated 'insurance cut' in an economy still treading water above the break-even line," said Stephen Innes at SPI Asset Management.
Katy Stoves, investment manager at Mattioli Woods, warned however: "This gentle cooling of the economy will certainly not justify a cut of interest rates to one percent as President Donald Trump is calling for."
Tokyo climbed 1.3 percent to a record high and Hong Kong rose 2.6 percent while Seoul, Shanghai, Taipei, Singapore, Kuala Lumpur, Bangkok and Jakarta also saw healthy gains.
Europe followed suit, with London, Frankfurt and Paris all higher in early trade.
Oil prices edged lower after OPEC raised its demand forecast for 2026, signalling it expected stronger global activity next year.
Investor focus was also on a summit in Alaska on Friday between Trump and Russian leader Vladimir Putin on the three-year-old Ukraine war.
In corporate news, AI firm Perplexity offered Google $34.5 billion for its Chrome web browser, which it may have to sell as part of antitrust proceedings.
Intel rose 5.5 percent on Wall Street after CEO Lip-Bu Tan met with Trump, who praised the executive after previously calling for him to step down.
Key figures at around 0820 GMT
Tokyo - Nikkei 225: UP 1.3 percent at 43,274.67 (close)
Hong Kong - Hang Seng Index: UP 2.6 percent at 25,613.67 (close)
Shanghai - Composite: UP 0.5 percent at 3,683.46 (close)
London - FTSE 100: UP 0.3 percent at 9,172.20
Euro/dollar: UP at $1.1718 from $1.1677 on Tuesday
Pound/dollar: UP at $1.3561 from $1.3501
Dollar/yen: DOWN at 147.39 yen from 147.77 yen
Euro/pound: DOWN at 86.41 pence from 86.45 pence
Brent North Sea Crude: DOWN 0.2 percent at $65.92 per barrel
West Texas Intermediate: DOWN 0.3 percent at $62.90 per barrel
New York - Dow: UP 1.1 percent at 44,458.61 (close)
Source: AFP
