Asia report: Markets rise on renewed Fed rate cut hopes

Markets in Asia advanced on the last trading day of the week, as expectations for some easing from the US Federal Reserve began to ripple across the Pacific.

In Japan, the Nikkei 225 was up 2% at 21,466.99, as the yen weakened 0.29% against the dollar to last trade at JPY 107.61.

Of the major components on the benchmark index, automation specialist Fanuc was up 2.3% and technology conglomerate SoftBank Group was 2.91% higher, while fashion firm Fast Retailing was down 0.35%.

The broader Topix index was 1.94% higher in Tokyo, finishing its trading day at 1,563.96.

On the mainland, the Shanghai Composite rose 0.79% to 2,924.20, and the smaller, technology-heavy Shenzhen Composite was 0.75% higher at 1,560.27.

South Korea’s Kospi was up 1.35% at 2,094.36, while the Hang Seng Index in Hong Kong rose 1.07% to 28,765.40.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 1.52%, and chipmaker SK Hynix ahead 2.81%.

Sentiment began buoyant in Asia, after a decent session on Wall Street overnight, which followed comments from New York Federal Reserve president John Williams that the central bank would need to “act quickly” in the case of a slowing economy.

“It’s better to take preventative measures than to wait for disaster to unfold,” Williams said in a speech, although the New York Fed clarified his comments by saying they were not indicative of the Federal Reserve’s plans.

“Investors are highly sensitive to dovish comments from Fed presidents these days, as they are trying to figure out whether the Fed would lower its interest rates by 50 basis points by the end of this month, instead of 25 basis points fully priced in,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“Given that a 50-basis-point cut would trigger a further rally in global equities, any remark of dovish nature translates immediately into higher asset prices.”

Oil prices were higher as the region went to bed, with Brent crude last up 1.7% at $63.00 per barrel, and West Texas Intermediate 0.83% higher at $55.76.

In Australia, the S&P/ASX 200 was ahead 0.77% at 6,700.30, with National Australia Bank shares leaping 2.19%.

The company - one of the country’s ‘big four’ banks - announced that it had hired Ross McEwan as its new chief executive officer.

McEwan has been widely credited with underpinning the recovery of the Royal Bank of Scotland in the UK, and would join NAB at a time when it was struggling to maintain customer trust following an official inquiry into Australia’s banking sector.

In other news from Australia, brewing giant Anheuser-Busch InBev said it was selling its Australian business to Japanese beer behemoth Asahi.

It added that it was still possibly keen in “a potential offering of a minority stake” in Budweiser’s Asia Pacific operations, after it cancelled a planned listing in Hong Kong several days earlier.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 managed gains of 0.1% to 10,753.15, remaining in record-high territory.

It was led higher by Tourism Holdings, which rose 5.1% a day after trading in its stock was halted in order to conduct a shortfall bookbuild following a rights offer.

Both of the down under dollars were weaker on the greenback, with the Aussie last 0.25% weaker at AUD 1.4169, and the Kiwi retreating 0.17% to NZD 1.4767.