Stocks in Asia went up on Tuesday, following gains in key US indexes, as weak manufacturing data dampened expectations of more aggressive Fed rate hikes.
As of 9:30 am in Thailand, the Japanese Nikkei 225 had gained 2.28%. South Korea’s Kospi advanced 1.94% on its return to trade after a holiday.
The S&P/ASX 200 index in Australia rose by 2.37%. The Reserve Bank of Australia is set to announce its interest rate decision later Tuesday.
Both mainland China and Hong Kong’s markets are closed today for a holiday.
Overnight in the US, with a gain of 765.38 points, or nearly 2.7%, the Dow Jones Industrial Average finished the day at 29,490.89. The S&P 500 advanced about 2.6% to 3,678.43. The Nasdaq Composite added nearly 2.3% to end at 10,815.43.
Fed officials kept up the drumbeat of rate hikes, said Bloomberg. John Williams, president of the New York Federal Reserve, recently stated that the Fed still has “significant” room to tighten monetary policy before interest rates in the US become so high that they begin to restrain economic growth.
The UN urged the Fed on Monday to pause interest rate hikes on global recession fears. The United Nations Conference on Trade and Development (UNCTAD) warned in its annual report on the global economic outlook that higher interest rates and austerity policies in wealthy nations posed an “imprudent gamble” that could have negative consequences, especially for low-income countries.
A hike in the Fed’s benchmark federal funds rate is predicted to cut economic output in other wealthy nations by roughly 0.5% over the following three years, while in poor countries the decline is projected to be closer to 0.8%.