FX.co ★ Asian Markets Track Wall Street Higher

Asian stock markets mostly rose on Thursday, influenced by broadly positive signals from Wall Street. Traders are responding to a key U.S. inflation report that indicated a larger-than-expected increase in core inflation, heightening expectations for a quarter-point rate cut at the Federal Reserve's policy meeting next week. Notably, Asian markets had largely declined on the previous day's session.

The inflation data appears to have diminished the likelihood of a 50 basis points rate cut by the Fed, but a continued reduction in rates is still anticipated in the forthcoming months. According to CME Group's FedWatch Tool, there is an 83% probability of a quarter-point rate cut, compared to a 17% chance of a half-point cut.

In Australia, the stock market is significantly higher on Thursday, recovering losses from the previous session. The benchmark S&P/ASX 200 has surged above the 8,000 mark, driven by gains in mining and technology sectors. Specifically, the S&P/ASX 200 Index gained 47.10 points or 0.59% to reach 8,035.00, after touching a high of 8,048.50 earlier, while the broader All Ordinaries Index climbed 55.80 points or 0.68% to 8,251.00. Australian shares had closed modestly lower on Wednesday.

Leading the mining sector, Rio Tinto rose by more than 1%, Mineral Resources surged by over 5%, and Fortescue Metals added nearly 1%, although BHP Group fell by almost 2%. In the oil sector, Beach Energy gained nearly 1%, Woodside Energy edged up 0.4%, and Origin Energy added more than 1%, while Santos remained flat.

In the technology segment, Afterpay owner Block gained over 4%, Xero added more than 1%, Appen surged nearly 6%, WiseTech Global rose by 2.5%, and Zip advanced by over 3%. Among the big four banks, Commonwealth Bank and National Australia Bank each gained almost 1%, Westpac added more than 1%, and ANZ Banking edged up 0.5%.

Within the gold mining sector, Evolution Mining and Gold Road Resources edged up between 0.1% and 0.5%, while Resolute Mining advanced more than 3% and Northern Star Resources gained over 1%. However, Newmont fell by more than 1%. In the currency market, the Australian dollar traded at $0.668 on Thursday.

Recouping losses from the previous two sessions, the Japanese market saw a sharp rise on Thursday, buoyed by positive cues from Wall Street. The Nikkei 225 climbed above the 36,600 level, with gains across all sectors led by index heavyweights and technology stocks. The benchmark Nikkei 225 Index closed the morning session at 36,605.62, up 985.85 points or 2.77%, after reaching a high of 36,873.37 earlier. Japanese shares had sharply declined on Wednesday.

Market heavyweight SoftBank Group surged nearly 8%, while Uniqlo operator Fast Retailing added almost 3%. In the automotive sector, Toyota gained nearly 3% and Honda added more than 2%. Within the tech sector, Tokyo Electron rose by almost 4%, Advantest surged more than 7%, and Screen Holdings added over 2%.

In the banking sector, Mizuho Financial and Mitsubishi UFJ Financial each gained nearly 2%, while Sumitomo Mitsui Financial added more than 1%. Among major exporters, Canon gained 1.5%, Mitsubishi Electric added over 4%, Panasonic advanced more than 2%, and Sony rose by over 1%. Notable gainers include Ebara, which soared by almost 10%, and IHI, which rose by nearly 9%, alongside significant gains from Tokuyama, NEC, Kawasaki Heavy Industries, Omron, Hitachi, and Fujikura. Conversely, Daiichi Sankyo fell by nearly 3%.

In the currency market, the U.S. dollar traded in the mid-142 yen range on Thursday.

Elsewhere in Asia, Taiwan and South Korea rose by 2.8% and 1.3%, respectively. New Zealand, China, Hong Kong, Singapore, Malaysia, and Indonesia each saw gains between 0.1% and 0.8%. On Wall Street, stocks initially moved sharply lower on Wednesday but staged a substantial turnaround. The tech-heavy Nasdaq led the recovery, with all major averages closing in positive territory.

After slipping by as much as 1.4% early in the session, the Nasdaq surged 369.65 points or 2.2% to 17,395.53. The S&P 500 jumped 58.61 points or 1.1% to 5,554.13, while the Dow rose 124.75 points or 0.3% to 40,861.71 after hitting its lowest intraday level in nearly a month.The major European markets delivered a mixed performance today. Germany's DAX Index experienced an uptick of 0.4%, while France's CAC 40 Index marginally declined by 0.1%. Similarly, the U.K.'s FTSE 100 Index slipped by 0.2%.

Crude oil prices saw a significant surge on Wednesday, rebounding from a three-year low recorded in the previous session. This recovery is attributed to concerns over extended production shutdowns in the offshore oil sector due to Hurricane Francine. West Texas Intermediate Crude oil futures for October settled higher by $1.56, or 2.37%, closing at $67.31 per barrel.