Asian Stock Market Boosted by Tech Sector

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Market News—The Asian stock market rose on Thursday, largely fueled by the technology sector. This increase was sparked by the Federal Reserve’s somewhat neutral stance, leading to speculation that the central bank might put a stop to its series of interest rate hikes. However, Chinese stocks in the Asian stock market experienced minimal gains due to a series of weak economic indicators in the country.

Federal Reserve’s Impact on the Asian Stock Market

Bloomberg—The Federal Reserve decided to keep rates steady on Wednesday. Comments from Chair Jerome Powell hinted at a potential pause in interest rate hikes for this year, particularly in light of the slowing U.S. economy. This led to a significant drop in U.S. Treasury yields in overnight trade, which boosted technology stocks in the Asian stock market.

Asian Stock Market Boosted by Tech Sector

Tech-heavy indexes in the Asian stock market saw substantial gains on Thursday. Hong Kong’s Hang Seng and South Korea’s KOSPI rose by 1.8% and 2%, respectively, despite data showing higher-than-expected consumer inflation growth in Korea in October.

The fall in U.S. Treasuries during overnight trade came after Powell stated that while the Fed is still far from meeting its 2% inflation target, monetary conditions have tightened significantly in recent months.

Chinese Stocks Struggle Amid Economic Concerns

Despite the positive sentiment, Chinese markets saw little movement within the Asian stock market. A series of weak purchasing managers index readings indicated a contraction in China’s manufacturing sector in October, casting doubts over an economic rebound this year.

This disappointing data, concerns over a potential collapse in China’s housing market, and default risks faced by several major developers kept traders wary of Chinese markets.

  • 2 November 2023