Asian stock markets opened on a strong note Monday, driven by positive cues from Wall Street’s rally on Friday.
The U.S. Federal Reserve’s preferred inflation measure showed a slower-than-expected rise in consumer prices, raising hopes for additional rate cuts in 2025.
The weekend news of an averted US government shutdown added to the optimistic sentiment.
Japan’s Nikkei 225 recovered, climbing 0.93% to 39,060 after six consecutive losing sessions.
Exporters and technology stocks led the rally, with automakers Toyota and Honda adding nearly 2% each, while Advantest surged 4%.
Hong Kong’s Hang Seng also halted its two-straight session losing streak on Monday.
The National Enterprises Index climbed 50 points, or 0.7%, to 7,194, while the Technology Index advanced 37 points, or 0.83%, to 4,481.
Tech stocks provided support to the market’s gains, with Xiaomi rising 0.7% and Alibaba up 0.6%.
China’s CSI 300 was also in the green on Monday reversing the losses from Friday.
At the time of writing, the index was up around 0.71%.
South Korean Kospi was also surging on Monday.
The index shot up over 1.5% with major players like Samsung Electronics and SK Hynix gaining 1.89% and 2.01%, respectively.
However, LG Energy Solution slipped 1.26%, while tech giants Naver and Kakao also faced major declines.
In Australia, the S&P/ASX 200 surged by 1.4% to 8,180.00, snapping a three-session losing streak.
Gains were broad-based, with the technology, mining, and financial sectors leading the way.
Wall Street in cheers on Friday
After closing the previous session with little change, stocks rallied sharply on Friday, reversing initial weakness and climbing decisively into positive territory as the day progressed.
The Dow Jones Industrial Average surged 498.02 points, or 1.2%, to 42,840.26, building on the modest gain seen on Thursday when the blue-chip index ended a ten-day losing streak.
The Nasdaq Composite jumped 199.83 points, or 1.0%, to 19,572.60, while the S&P 500 rose 63.77 points, or 1.1%, to close at 5,930.85.
Despite Friday’s strong gains, the major averages logged weekly losses.
The Dow dropped 2.3%, the S&P 500 declined 2.0%, and the Nasdaq fell 1.8%.
The rally was fueled by investor reaction to the Federal Reserve’s preferred inflation gauge, which provided fresh insights into consumer price trends.
US inflation data
The US Commerce Department reported that the Personal Consumption Expenditures (PCE) price index rose by 0.1% in November, following a 0.2% increase in October.
This was below economists’ expectations for another 0.2% rise.
On an annual basis, the PCE price index grew by 2.4% in November, up from 2.3% in October but slightly below the 2.5% increase anticipated by analysts.
Excluding volatile food and energy prices, the core PCE price index also edged up 0.1% in November after a 0.3% gain in October, falling short of the 0.2% rise forecast by economists.
The annual growth rate of the core PCE price index remained steady at 2.8% in November, defying expectations for an acceleration to 2.9%.
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