Asian Shares Bounce Back On Fed Rate Cut Hopes

(RTTNews) - Asian stocks rose broadly on Wednesday, snapping three days of losses as optimism that the U.S Federal Reserve may go for further interest-rate cuts outweighed renewed U.S.-China trade tensions.

Citing job-market weakness, Fed Chair Jerome Powell on Tuesday indicated a likely interest-rate reduction this month.

Chinese markets rose sharply as new data showed China's deflation eased in September, but not quite as much as expected.

Official data showed consumer prices dropped 0.3 percent on a yearly basis in September, following a 0.4 percent decrease in August. Producer prices slid 2.3 percent year-on-year, slower than the 2.9 percent decline in August.

The benchmark Shanghai Composite index climbed 1.22 percent to 3,912.21 while Hong Kong's Hang Seng index surged 1.84 percent to 25,910.60.

Japanese markets rebounded after falling sharply on Tuesday due to uncertainties surrounding political situation in the country and concerns over renewed U.S.-China trade frictions.

The Nikkei average rallied 1.76 percent to 47,672.67, after having fallen 2.6 percent in the previous session. The broader Topix index settled 1.58 percent higher at 3,183.64 as the country's first sale of government bonds since the collapse of the ruling coalition drew firm demand.

Semiconductor-related stocks rebounded, with SoftBank Group surging 5.1 percent and Advantest adding 2.2 percent.

Online retailer Mercari soared 14.2 percent after announcing it was pulling out of its on-demand employment service.

Seoul stocks soared to record high levels amid bets the Federal Reserve could end its quantitative tightening soon.

Also, investors pinned hopes that the government's new set of measures to rein in home prices could accelerate capital inflows into the financial market.

The Kospi average surged 2.68 percent to 3,657.28, with bio and tech stocks pacing the gainers. Samsung Biologics soared 9.7 percent, Samsung Electronics rallied 3.7 percent and SK Hynix advanced 2.7 percent.

Australian markets rose the most in two weeks, led by banks and mining stocks. Energy stocks inched lower, with Santos falling 2.2 percent due to weaker oil prices.

The benchmark S&P/ASX 200 rose 1.03 percent to 8,990.90 while the broader All Ordinaries index closed up 0.98 percent at 9,299.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index edged up by 0.23 percent to 13,307.40, snapping a three-day losing streak.

The dollar held losses in Asian trade following dovish remarks from Fed Chair Jerome Powell and President Trump's comments defending his tariff policy against BRICS members, claiming the bloc was "an attack on the dollar".

Gold hit a new peak above $4,200 per ounce while oil hovered near five-month lows after the International Energy Agency warned that a looming global oil oversupply will be larger than previously anticipated.

U.S. stocks ended mixed overnight as the U.S. and China began charging tit-for-tat port fees on each other's ships, the IMF warned of a "disorderly" global market correction, and Fed Chair Jerome Powell signaled two more quarter-point interest-rate cuts this year, citing a sharp slowdown in hiring.

Powell cautioned that "there is no risk-free path for policy as we navigate the tension between our employment and inflation goals."

The Dow ended 0.4 percent higher following strong third-quarter results from several big banks, including JPMorgan Chase, Citigroup, Goldman Sachs and Wells Fargo.

The S&P 500 eased 0.2 percent and the tech-heavy Nasdaq Composite gave up 0.8 percent after President Trump accused China of an "economically hostile act" by purposefully not buying U.S. soybeans and threatened to terminate business with China having to do with cooking oil and other elements of trade as retribution.