Asia Markets Climb as Fed Signals Rate Cuts, But China Stocks Slide

Asian markets bounced on Thursday, lifted by dovish comments from U.S. Federal Reserve officials and optimism after a smooth auction of Japanese government bonds. The upbeat sentiment helped ease investor nerves after days of volatility, though China’s markets tumbled on renewed regulatory pressure.

Stocks in Japan, India, and Australia posted strong gains. The Nikkei 225 surged 1.6% while Australia’s benchmark rose 1%, reversing its sharpest sell-off since April. India’s Sensex climbed 1.1% in early trade, buoyed by tax cuts aimed at stimulating domestic demand. Analysts said bargain-hunters had stepped in, with many investors seeing September weakness as a buying opportunity.

By contrast, China’s CSI 300 index slumped as much as 2.6%, marking its third consecutive decline. Reports suggested regulators are preparing measures to cool speculative trading, sparking a broad sell-off. The losses dragged MSCI’s Asia-Pacific index (excluding Japan) down 0.2%, wiping out earlier gains.

Investor sentiment was also shaped by signals from the U.S. Federal Reserve. Officials, including Governor Christopher Waller, hinted at rate cuts in the coming months. Market bets for a September rate cut grew stronger after weaker U.S. job openings data showed vacancies at a 10-month low, piling pressure on the Fed to act. Traders are now pricing in a near-certain cut, according to the CME FedWatch tool.

Meanwhile, currency and commodities markets saw mild shifts. The U.S. dollar ticked higher against the yen and euro, while Brent crude slipped 0.6% to $67.17 a barrel. Gold retreated 0.8% from record highs, trading at $3,529.94 an ounce. Analysts say that while Fed support is boosting global risk appetite, concerns over China’s regulatory crackdown and elevated global bond yields remain a drag on confidence.

Source: Reuters