Asian stocks rose at the opening session today, tracking significant gains on Wall Street, which hit a record high after data showed the US economy grew at its fastest pace in two years. The MSCI Asia Index rose 0.2%, with Japan and South Korea gaining, while Australian shares edged lower in the shortened trading session. US stocks also posted gains for the fourth straight day, driven by major technology stocks, which rose nearly 1%.
Investors' attention was also focused on commodity markets, with gold prices surging to a new record above $4,500 per ounce. The rise in gold prices was driven by escalating geopolitical tensions, particularly following the US blockade of Venezuelan oil tankers, which further exacerbated market uncertainty. Silver also hit an all-time high, while copper prices surpassed $12,000 per ton for the first time.
Oil continued its rally for six consecutive days, with West Texas Intermediate (WTI) prices trading above $58.50 per barrel, fueled by escalating geopolitical tensions. Although strong US economic growth data has eased speculation about a Federal Reserve interest rate cut, the market remains strong, particularly in technology stocks, which investors continue to seek.
The strength of the US economy, demonstrated by GDP data that increased 4.3% in the third quarter, reinforces the view that solid growth will support corporate performance and reduce speculation about a Fed rate cut. However, the market remains hopeful that the Federal Reserve will maintain its dovish stance, especially with the possibility of an upcoming Fed chair change.
On the currency front, the South Korean won strengthened after the government warned about excessive weakness in the currency, following a series of meetings discussing measures to support it. Meanwhile, the Indian rupee weakened, with the Indian central bank announcing a new policy to increase bank liquidity to support the depressed currency.
News from Trump regarding the upcoming nomination of the Federal Reserve chair, which is expected to lead to a rate cut, further heightened political pressure on US monetary policy. Investors now expect moderate inflation and strong growth to move the economy toward a "Goldilocks" scenario, with strong economic growth and lower inflation, keeping the Fed's policy stance loose. (asd)
Source: Bloomberg
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